KCG FUTURES PM GRAIN FUTURES COMMENTS

KCG FUTURES   PM GRAIN FUTURES COMMENTS

 

Bean and meal futures closed up about 1%, while corn and wheat closed lower.  Bean futures began to rally just before the Weeky Export Liftings were released, consolidated the rally, and then found enough buying interest to stage another leg up on their post- report rally to trade up almost 80 cents above Friday’s lows before eroding into the close.  Yet another week of astounding bean loadings apparently focused traders attention on the need to ration tight US bean supplies.  The SF/CZ ratio rallied 5 points to close at 3.04%.  On the other hand, the board appears to be running ahead of the cash market as the CIF bean barge basis for November dropped back 6 cents, and barge freight costs bumped to a new harvest high.

It’s interesting to note that beans are getting loaded for export at every US port imaginable – including more than 2 million bushels loaded on the Great Lakes.  Trading in SX ends on Thursday.  So far the 200 Chicago and 75 Burns Harbor warehouse receipts delivered against the SX appear to be stopped by LDC.  It’s conceivable that LDC intends to load these beans to go to China.  It’s possible that the SX-SF could get a bit wilder if someone is caught short. – Helen Pound

 

GRAIN FUTURES CLOSING PRICES AND CHANGE

Close – Rounded

 

CZ3

SF4

SMZ3

BOZ3

WZ3

KWZ3

MWZ3

Today’s Close

$4.32

$13.15

$428

$0.4075

$6.45

$7.03

$7.01

     Change

-3

+14

+6

+0.0033

-1

-3

-3

Total Open Interest

1,373,969

573,660

281,180

338,843

397,454

153,894

57,060

     Change

-14,211

+513

+2,053

+4,031

+7,319

+659

+257

OVERNIGHT PERCENT CHANGE IN FUTURES VALUE

Grains

Corn

Soybeans

Soy Meal

Soy Oil

Wheat

KC Wheat

MN Wheat

November

+0.9 %

December

-0.6 %

+1.3 %

+0.8 %

-0.2 %

-0.4 %

-0.5 %

January

+1.0 %

+1.4%

+0.7 %

March

-0.6 %

+1.2 %

+1.5 %

+0.7 %

-0.2%

-0.5 %

-0.4 %

July

-0.7 %

+1.1 %

+1.3 %

+0.6 %

-0.5%

-0.7%

-0.4 %

December (or X), 2014

-0.6 %

+0.8 %

+0.7 %

+0.7 %

-0.5 %

-1.0 %

-0.3 %

OVERNIGHT PERCENT CHANGE IN FUTURES VALUE

Macros

 

Dollar

10 Year

S&P 500

Crude Oil

Copper

Gold

Silver

Percent Daily Change

+0.0 %

-0.2 %

-0.1 %

-2.2 %

-1.2 %

-0.8 %

-2.9 %

TERM STRUCTURE

Carries (Inverses) – Rounded

 

Corn

Soybeans

Soy meal

Soy Oil

Wheat

KC Wheat

MN Wheat

November – January

(4 3/4)

     Percent Full Carry

(27 %)

December(orF) – March

11 3/4

(18)

(18.1)

0.0070

1 0 1/2

3/4

11 1/4

     Percent Full Carry

58 %

(53 %)

50 %

3 %

43 %

December(orF)–July14

27 1/2

(43)

16 1/4

(5 1/4)

25 1/4

     Percent Full Carry

58 %

(63 %)

33 %

(10 %)

41 %

INTERMARKET SPREADS

                                                                    Rounded

 

W-C

S-W

S-C

S/C

BC*

MW-W

MW-KW

KW-W

December

213

631

842

3.04 %

70

56

-2

58

March

212

641

853

2.96 %

61

57

9

48

July

202

610

812

2.77 %

60

65

29

37

Dec 2014

211

493

704

2.49 %

74

55

21

33

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

Jan (F) Low

Monday

11.04

11.05

11.06

11.07

11.08

11.08

Monday

11.11

11.12

CZ3

570

75 %

75 %

74 %

74 %

75 %

75 %

76 %

76 %

CN4

592

76 %

76 %

75 %

75 %

77 %

77 %

78 %

78 %

 

 

OZ3

338

98 %

101 %

102 %

100 %

99 %

99 %

101 %

100 %

ON4

409

75 %

75 %

75 %

75 %

75 %

75 %

76 %

76 %

 

 

WZ3

779

85 %

84 %

84 %

84 %

83 %

83 %

83 %

83 %

WN4

775

88 %

87 %

86 %

86 %

86 %

86 %

86 %

85 %

 

 

KWZ3

830

88 %

87 %

86 %

86 %

85 %

85 %

85 %

85 %

KWN4

790

91 %

90 %

90 %

89 %

89 %

89 %

89 %

88 %

 

 

MWZ3

858

84 %

83 %

83 %

83 %

83 %

83 %

82 %

82 %

MWN4

890

83 %

83 %

83 %

82 %

82 %

82 %

82 %

82 %

 

 

SX3

1259

100 %

100 %

100 %

102 %

104 %

104 %

104 %

105 %

SN4

1287

95 %

95 %

95 %

96 %

97 %

97 %

98 %

99 %

 

 

SMZ3

353

112 %

111 %

112 %

114 %

120 %

120 %

120 %

121 %

SMN4

365

102 %

102 %

103 %

103 %

106 %

106 %

107 %

108 %

 

 

BOZ3

49.00

84 %

84 %

84 %

83 %

82 %

82 %

83 %

83 %

BON4

49.92

85 %

85 %

85 %

84 %

84 %

84 %

84 %

85 %

  • +   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.
  • The USDA did not issue an October S+D report as the government was shut down for several weeks.  Little by little the USDA has been updating their reports – mostly indicating sizable export business during the shutdown.  Sizable business and still tight pipeline pushed beans and wheat futures up to new recent highs, while corn made new contract lows.
  • Surprisingly, there was little change in supply/demand balances in terms of carryover as a percent of use from the Sept to Nov S+D report.  The report can best be described as “not any more bearish than the market has already been trading”.

                        

 

 

KCG FUTURES   PM GRAIN FUTURES COMMENTS

 

Bean and meal futures closed up about 1%, while corn and wheat closed lower.  Bean futures began to rally just before the Weeky Export Liftings were released, consolidated the rally, and then found enough buying interest to stage another leg up on their post- report rally to trade up almost 80 cents above Friday’s lows before eroding into the close.  Yet another week of astounding bean loadings apparently focused traders attention on the need to ration tight US bean supplies.  The SF/CZ ratio rallied 5 points to close at 3.04%.  On the other hand, the board appears to be running ahead of the cash market as the CIF bean barge basis for November dropped back 6 cents, and barge freight costs bumped to a new harvest high.

It’s interesting to note that beans are getting loaded for export at every US port imaginable – including more than 2 million bushels loaded on the Great Lakes.  Trading in SX ends on Thursday.  So far the 200 Chicago and 75 Burns Harbor warehouse receipts delivered against the SX appear to be stopped by LDC.  It’s conceivable that LDC intends to load these beans to go to China.  It’s possible that the SX-SF could get a bit wilder if someone is caught short. – Helen Pound

 

 

WEEKLY USDA CROP QUALITY AND PROGRESS REPORT

CORN

  • 84 % harvested versus 79% average –
    • Iowa 88% harvested (80% ave)
    • Illinois 93% harvested (82% ave)
    • With cold, dry weather harvest is moving along at better than average pace

BEANS

  • 91% harvested versus 92% average – just behind the average pace
    • Iowa 98% harvested (96% ave)
    • Illinois 97% harvested (93% ave)

HRS

  • Harvest complete

HRW

  • 84% emerged versus 80% average
  • Winter wheat condition rating at 102% of normal – well above last year’s 84%
    • SRW 104% of normal – Illinois 77% emerged
    • HRW 101% of normal – Kansa 92% emerged

 

CORN QUALITY (Percent of Normal) and PROGRESS (Percent Harvested)

 

Quality

Quality

Quality

 

Progress

Progress Progress
  This Week

Last Week

Last Year

This Week

Last Week

Avg

CORN (96.4)

na

na

na

84 %

73 %

79 %

 

ND (4.1)

na

na

na

64 %

47 %

63 %

SD (5.9)

na

na

na

79 %

63 %

73 %

Mn (9.0)

na

na

na

87 %

73 %

80 %

Wi (4.4)

na

na

na

62 %

50 %

69 %

 

Neb 9.9)

na

na

na

81 %

71 %

76 %

Ia (14.2)

na

na

na

88 %

75 %

80 %

Ks (4.6)

na

na

na

91 %

87 %

90 %

Mo (3.4)

na

na

na

89 %

82 %

87 %

 

Mi (2.6)

na

na

na

62 %

48 %

67 %

Ill (12.2)

na

na

na

93 %

83 %

82 %

Ind (6.1)

na

na

na

85 %

74 %

82 %

Oh (4.0)

na

na

na

77 %

64 %

70 %

(planted acres in each state)

 

 

SOYBEAN QUALITY (Percent of Normal) and PROGRESS (Percent Harvested)

 

Quality

Quality Quality

Progress

Progress Progress
 

This Week

Last Week

Last Year

This Week

Last Week

Avg

BEANS(76.1)

na

na

na

91 %

86 %

92 %

 

ND (4.9)

na

na

na

95 %

90 %

92 %

SD (4.6)

na

na

na

97 %

92 %

96 %

Mn (6.8)

na

na

na

98 %

96 %

96 %

 

Neb (4.7)

na

na

na

100 %

97 %

98 %

Ia (9.4)

na

na

na

98 %

95 %

96 %

Ks (3.9)

na

na

na

86 %

81 %

89 %

Mo (5.3)

na

na

na

75 %

64 %

85 %

 

Ill (9.4)

na

na

na

97 %

92 %

93 %

Ind (5.1)

na

na

na

93 %

88 %

94 %

Oh (4.7)

na

na

na

95 %

91 %

92 %

 

Ark (3.3)

na

na

na

82 %

74 %

89 %

La (1.1)

na

na

na

100 %

99 %

98 %

Miss (2.0)

na

na

na

97 %

94 %

96 %

(planted acres in each state)

 

 

WINTER WHEAT QUALITY (Percent of Normal) and PROGRESS (Percent Emerged)

 

Quality

Quality

Quality

Progress

Progress

Progress

 

This Week

Last

Week

Last Year

This Week

Last Week

Avg

WINTER (41.9)

102 %

101 %

88 %

78 %

78 %

73 %

 

  HRW

101 %

100 %

84 %

Mt (2.1)

107 %

105 %

90 %

94%

88 %

83 %

SD (1.3)

105 %

105 %

67 %

92 %

85 %

85 %

Nebr (1.5)

103 %

103 %

75 %

100 %

97 %

97 %

 

Col (2.2)

102 %

103 %

84 %

96 %

93 %

94 %

Ks (9.3)

102 %

100 %

87 %

92 %

86 %

87 %

Ok (5.4)

106 %

104 %

77 %

90 %

84 %

84 %

Tx (5.7)

91 %

91 %

85 %

74 %

69 %

69 %

 

  SRW

104 %

103 %

104 %

Ill (0.830)

107 %

102 %

102 %

77 %

75 %

77 %

Ind (0.470)

105 %

106 %

107 %

83 %

72 %

75 %

Mi (0.590)

108 %

110 %

106 %

91 %

78 %

88 %

Oh (0.630)

112 %

111 %

106 %

90 %

81 %

78 %

 

Mo (1.100)

97 %

98 %

101 %

58 %

43 %

58 %

Ark (0.710)

102 %

102 %

105 %

55 %

38 %

53 %

N Car (0.960)

105 %

104 %

105 %

25 %

14 %

24 %

 

  SWW

106 %

108 %

105 %

Wa (1.7)

106 %

110 %

107 %

88 %

78 %

87 %

(2012-13 planted acres in each state)

 

 

WEEKLY EXPORT LOADINGS –in million bushels – week ended 11.08.13

 

     The pace of soybean loadings continued at a dramatically high pace again this week, and is dominating loading capacity at export terminals.  Load outs of beans were triple the weekly totals needed to hit the USDA export targets.  Wheat exports have slowed dramatically.

 

Wk End 11.08.13

Estimate

Needed

 

 

Wk End 11.01.13

 

Total

Year Estimate

Pecent

Wheat

12.2

4-15

 

 

8.9

 

611

1100

56 %

Corn

16.7

27-34

 

 

31.4

 

223

1400

16 %

Beans

79.7

63-90

 

 

80.5

 

418

1450

29 %

Destinations:

  Wheat –China, Nigeria, South Korea, Philippines, Veneauela and others

  Corn- Mexico, China, Japan, Peru, Colombia and others

  Beans- China and many others

 

LOADINGS – WHEAT BY CLASS

 

HRS

HRW

SRW

WHITE

DURUM

This Week

1.8

5.1

3.1

2.2

na

 

 

 

GRAIN FUTURES DELIVERIES – SEE BELOW FOR FIRST NOTICE DAY

 

Corn

Beans

Meal

Soy Oil

W

KC

Mpls

NOV-JAN

(4 3/4)

% FULL CARRY

(27 %)

 

DEC(F)- MCH

11 3/4

(18)

(6.3)

0.0030

10 1/2

3/4

11 1/4

% FULL CARRY

58 %

(53 %)

50 %

3 %

43 %

 

 

Deliveries

  Tues  11.12

29

  Mon 11.11

65

  Fri 11.08

2

  Thurs 11.07

257

  Wed 11.06

271

  Tues  11.05

238

  Mon 11.04

275

  Fri 11.01

0

  Thurs 10.31

0

 

Oldest Long

11.04.13

 

Delivery Stocks

3.6

6.8

58.8

81.0

22.5

 

Registrations

0

275

0

9,930

213

0

Locations

Chicago

All over

Toledo

 

 

NOV or DEC

OPEN INTERST

520,324

2,177

90,936

107,720

166,020

53,482

23,092

   CHANGE

-46,105

-1,023

-5,050

-2,674

-13,046

-4,759

-790

SX First Notice Day is Thursday 10.31.13 – Last Trading Day is Thursday 11.14.13

Dec First Notice Day is Friday 11.29.13 – Last Trading Day is Friday 12.13.13

Registrations for Delivery against Futures and Open Interest are in # contracts.

Stocks in Delivery elevators are in millions of bushels.

 

 

DAILY GRAIN RECEIPTS AND SHIPMENTS AT CBT FUTURES DELIVERY TERMINALS

-in millions of bushels

 

RECEIVED

SHIPPED

NET INTO STORAGE

TUESDAY

TOTAL STOCKS

 

CORN

1.077

0.523

0.554

4.387 (+0.770)

SOYBEANS

1.245

1.110

0.135

6.237 (-0.555)

WHEAT

0.025

0.604

-0.579

55.713 (-3.121)

KC WHEAT

0.211

0.890

-0.679

79.082 (-1.914)

 

 

 

 

 

 

 

 

  • Bean futures delivery terminal receipts and shipments are active. More beans shipped than corn.
  • Corn futures delivery terminal receipts and shipments are active, with a portion of the unloads continuing head toward storage.  Almost as much corn received as beans.
  • In Chicago wheat futures delivery terminal receipts are slow , but load outs are increasing.
  • KC futures delivery terminals have periodic large wheat receipts and/or shipments.  The shipments may go to either mills or exporters.  Net load outs are increasing.

 

 

 

 

This communication has been prepared by the trading, market making and/or the sales personnel (“Trader”) of Knight Capital Americas, LLC. (“KCA”), a subsidiary of KCG Holdings, Inc. (“KCG”). The information contained herein may be the personal perspective of the KCG Trader and/or commentary compiled from public sources. The information from public sources is believed to be reliable but KCG does not guarantee or represent its accuracy or completeness. The opinions and views expressed by the individual trader do not represent the opinions and views of KCG, its affiliates, officers or other personnel. No responsibility and no express or limited liability is assumed jointly or individually for any losses or damages arising out of errors, omissions, delays in the receipt of the information, or any actions taken in reliance upon the information. The information contained herein does not provide investment advice and is not a sufficient basis for an investment decision. No information contained herein should be construed as a solicitation or an offer to buy or sell any security or product. Indications of interest, opinions or views expressed by the trader are not firm orders or quotes and may not be current. No responsibility is assumed to maintain and/or update the information. KCA most likely makes a market in the securities mentioned in this document and its personnel, including those involved in the preparation or issuance of the material may take a position or action which may be inconsistent with the opinions and views expressed therein. Questions regarding the information presented herein or to request a copy of this document should be referred to your KCG Representative.

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