KCG FUTURES PM GRAIN FUTURES COMMENTS

KCG FUTURES   PM GRAIN FUTURES COMMENTS

 

The bean futures closed a chunk higher, while the corn closed near unchanged and the wheat closed a chunk lower.

  • Beans gained back what they lost yesterday as traders priced in the NOPA report showing better than expected soybean crush. SX retraced its price range for the last three sessions as it consolidates its recent price break.
  • Corn held on to yesterday’s gains on ideas that corn demand is improving as rumors that China has bought US corn have been circulating.  CZ closed about the middle of the range it has held for the last two weeks – just above contract lows.
  • Wheat futures broke below the range it has held the past couple of weeks as it consolidated a several week rally sparked by unusually large Brazilian HRW purchases.  Now that the Argentine wheat harvest is just several weeks away, some traders think that these purchases will slow.  Inter and intra market wheat spreads appear to be liquidating.

 

Financial markets are hoping that Congress passes legislation today to extend the debt ceiling and get furloughed workers back on the job.  If so, then expect a slew of information from the USDA including recent export business.  Today’s market action suggests that there may be reports of more bean and corn sales and less wheat business.

       Helen Pound

GRAIN FUTURES CLOSING PRICES AND CHANGE

Close – Rounded

 

CZ3

SX3

SMZ3

BOZ3

WZ3

KWZ3

MWZ3

Today’s Close

$4.43

$12.77

$404

$0.4137

$6.82

$7.45

$7.43

     Change

-1

+10

-+1

+0.0071

-4

-12

-8

Total Open Interest

1,237,489

641.740

265,574

305,844

3669,228

155,273

49,051

     Change

+5,178

-3,770

-363

-4,988

-3,264

+900

-161

OVERNIGHT PERCENT CHANGE IN FUTURES VALUE

Grains

Corn

Soybeans

Soy Meal

Soy Oil

Wheat

KC Wheat

MN Wheat

December (or X), 2013

-0.2 %

+0.8 %

%

+0.4 %

%

+1.7 %

-0.6 %

-1.5 %

-1.0 %

July, 2014

-0.3 %

+0.5 %

-0.2 %

+1.6 %

-0.7 %

-1.0 %

-0.9 %

December (or X), 2014

-0.2 %

+0.3 %

-0.4 %

+1.5 %

-0.7 %

-0.9 %

-1.0 %

OVERNIGHT PERCENT CHANGE IN FUTURES VALUE

Macros

 

Dollar

10 Year

S&P 500

Crude Oil

Copper

Gold

Silver

Percent Daily Change

-0.1 %

+0.3 %

+1.2 %

+1.1 %

-0.1 %

+0.7 %

+0.8 %

TERM STRUCTURE

Carries (Inverses) – Rounded

 

Corn

Soybeans

Soy meal

Soy Oil

Wheat

KC Wheat

MN Wheat

November – January

(2)

     Percent Full Carry

(10 %)

December(orX) – March

12

(14)

(12)

0.0069

10

(2)

9

     Percent Full Carry

64 %

(40 %)

(121 %)

103 %

48 %

(7 %)

45 %

December(orX)–July14

28

(30)

(23)

0.0134

3

(18)

13

     Percent Full Carry

61 %

(44 %)

(98 %)

85 %

6 %

(33 %)

28 %

Dec(orX)–Dec(orX)14

40

(108)

(52)

0.0150

19

2

19

     Percent Full Carry

51 %

(105%)

(132 %)

56 %

23 %

2 %

23 %

INTERMARKET SPREADS

                                                                    Rounded

 

W-C

S-W

S-C

S/C

BC*

MW-W

MW-KW

KW-W

December

239

595

834

2.88 %

67

61

-2

63

July 2014

214

563

776

2.65 %

62

72

29

43

Dec 2014

217

469

686

2.42 %

71

62

16

46

*BC = Synthetic Soybean Crush
COMPARISON OF CURRENT FUTURES PRICE AND JANUARY (F) CROP REPORT LOWS – percent of Low
  Low (F)

Monday

10.07

10.08

10.09

10.10

10.11

Monday

10.14

10.15

10.16

CZ3

570

79 %

78 %

78 %

77 %

76 %

77 %

78 %

78 %

CN4

592

81 %

79 %

80 %

79 %

78 %

79 %

80 %

79 %

 

 

OZ3

338

94 %

94 %

94 %

95 %

94 %

94 %

98 %

99 %

ON4

409

73 %

72 %

72 %

73 %

72 %

73 %

73 %

74 %

 

 

WZ3

779

89 %

89 %

89 %

88 %

89 %

89 %

88 %

87 %

WN4

775

90 %

90 %

90 %

89 %

89 %

90 %

89 %

88 %

 

 

KWZ3

830

91 %

92 %

91 %

91 %

92 %

92 %

91 %

90 %

KWN4

790

94 %

94 %

94 %

93 %

93 %

94 %

93 %

92 %

 

 

MWZ3

858

87 %

88 %

88 %

88 %

88 %

88 %

87 %

87 %

MWN4

890

86 %

86 %

86 %

86 %

86 %

86 %

86 %

85 %

 

 

SX3

1259

103 %

102 %

102 %

102 %

101 %

101 %

101 %

101 %

SN4

1287

98 %

97 %

97 %

97 %

96 %

97 %

96 %

97 %

 

 

SMZ3

353

119 %

118 %

117 %

116 %

114 %

115 %

114 %

114 %

SMN4

365

108 %

107 %

106 %

105 %

104 %

105 %

105 %

104 %

 

 

BOZ3

49.00

81 %

83 %

83 %

84 %

82 %

82 %

83 %

84 %

BON4

49.92

83 %

84 %

84 %

85 %

83 %

84 %

84 %

86 %

 

  • +   Jan lows occurred in anticipation of bearish Production, Stocks, Winter Wheat Seeding, and WASDE reports.  Instead the Jan reports were friendlier than expected, with less than expected US stocks and tighter world carryover.
  • –  The USDA February report showed just a few changes – more wheat feeding – but was viewed as “not bullish”.  South American and US crop growing weather improved during February.
  • -/+  The feature in the USDA March report was an increase of 100 mln bu of US corn feeding offset by 75 million bushels fewer US corn exports and an additional 25 million bushels of US corn imports.
  •   The March Quarterly Stocks report was a bearish surprise with grain stocks above estimates – and corn stocks well above trade estimates forcing corn limit down.
  • -/+  The April S+D report showed World carryover for corn, beans and wheat above the high end of the analysts’ range of guesses.  US carryover didn’t increase as much as suggested by the Stocks report – with bean carryover unchanged at pipeline needs.  Cool, wet weather delayed planting and reduced HRW quality.
  •   The May S+D report showed increased South American corn production, as well as increased South American old crop corn and bean carryover as China reduced old crop imports.  US old crop bean and corn stocks continue to be exceedingly tight.  New crop US and World corn, bean and wheat carryover were larger than the average guesses.  Planting weather is erratic, and analysts expect some corn, bean and spring wheat acres to go unplanted.
  • -/+  The June S+D report showed another increase in ‘12-13 South American corn production, but a decrease in bean production. The ‘13-14 S+D showed reduced Ukraine and Russian wheat production, as well as lower US corn production.  World wheat supplies continue to be abundant, while world corn and bean supplies are expected to become more comfortable as US new crop is harvested this fall.  In contrast, US bean supplies are expected to remain exceedingly tight.
  • +   The 6.28.13 Quarterly Stocks Report was a bullish surprise which showed less than expected corn and bean stocks with greater than expected March-May use.
  • –  The 6.28.13 Acreage Report was a bearish surprise which showed harvested corn acres up 2% from last year and up 1% for beans.  In addition, yields are expected to be much improved over last year.  Harvested wheat acres are expected to be down 7% from last year – with many less HRW and HRS acres, but many more SRW acres.  This was somewhat offset by heavy old crop HRW and HRS stocks and less abundant SRW stocks.
  • -/+   The July S+D was the most neutral report that the USDA has issued in a while, with changes mostly well within the range of guesses.  New crop US carryover for soybeans remains quite tight (but more abundant than old crop) and corn remains tight (but much more abundant than old crop), while wheat carryover is finally moving back to more normal levels (much less than the overly abundant carryover of the past several years).  Improving weather has supported new crop quality and progress, and weighed on prices.
  • +     The August S+D Report was a bullish surprise as the USDA cut yield and production estimates for US new crop corn and beans. The result was reduced US and World carryout.  Carryout as a percent of use for new crop beans dropped to 6% (-2%) – indicating exceedingly tight new crop supplies but still better than the 2012-13 C/U% of 4%.  Corn C/U% is also tight at 14 %.  Tight stocks create volatile responses to changes in the weather forecast.  Last Half August US weather turned hot and dry, and sparked a short covering rally.
  • +/-     The September S+D report featured a surprise increase in the new crop corn yield, in contrast to   the new crop bean yield which was reduced as anticipated.  This pushed the SX/CZ ratio up to 3.01%.  Wheat is now being priced as a “food grain” rather than as “feed grain” – as it was the last couple of years when wheat stocks were enormous.
  •      The Quarterly Grain Stocks report showed much more corn than expected, slightly more beans than expected, and much less wheat than expected – indicating more than expected wheat feeding.  The Small Grain Summary showed much less than expected HRW production, but much more than expected production of HRS, SRW, and White wheat.

 

 

 

 

 

 

KCG FUTURES   PM GRAIN FUTURES COMMENTS

 

The bean futures closed a chunk higher, while the corn closed near unchanged and the wheat closed a chunk lower.

  • Beans gained back what they lost yesterday as traders priced in the NOPA report showing better than expected soybean crush. SX retraced its price range for the last three sessions as it consolidates its recent price break.
  • Corn held on to yesterday’s gains on ideas that corn demand is improving as rumors that China has bought US corn have been circulating.  CZ closed about the middle of the range it has held for the last two weeks – just above contract lows.
  • Wheat futures broke below the range it has held the past couple of weeks as it consolidated a several week rally sparked by unusually large Brazilian HRW purchases.  Now that the Argentine wheat harvest is just several weeks away, some traders think that these purchases will slow.  Inter and intra market wheat spreads appear to be liquidating.

 

Financial markets are hoping that Congress passes legislation today to extend the debt ceiling and get furloughed workers back on the job.  If so, then expect a slew of information from the USDA including recent export business.  Today’s market action suggests that there may be reports of more bean and corn sales and less wheat business.

       Helen Pound

 

 

DAILY GRAIN RECEIPTS AND SHIPMENTS AT CBT FUTURES DELIVERY TERMINALS

-in millions of bushels

 

RECEIVED

SHIPPED

NET

 

CORN

0.107

0.076

0.031

SOYBEANS

1.814

1.872

-0.058

WHEAT

0.036

0.144

-0.108

KC WHEAT

0.288

0.011

0.277

  • Bean futures delivery terminal receipts and shipments continue at an active pace
  • Corn futures delivery terminal receipts and shipment are slow
  • Wheat futures delivery terminal receipts and shipment are slow

 

 

 

 

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