Knight AM Grain Comments

AM GRAIN FUTURES COMMENTS Thursday 4.04.13

Even a healthy bean and corn export sales report was unable to create support in the grain futures market. The firmer dollar (much weaker Yen) continues to weigh on commodity prices in general, and combined with negative recent USDA reports has been encouraging Fund liquidation.
– Helen Pound

WEEKLY EXPORT SALES REPORT
BEANS
· Total weekly bean sales were well above the range of analysts estimates, with about the same number of new crop sales as old.
· Old crop bean sales rate was well above the quantity needed to be sold each week in order to hit USDA estimates.
· The US has sold 99% of the USDA expected bean sales for the year and exceeds the average five year pace of sales. We need to sell only 20 mln bu more in the next 22 weeks to hit the USDA target for the year.
· The pace of shipments also exceeds the average five year pace with 90% shipped.
· Total unshipped sales plus unsold sales versus the USDA export sales estimate is quite small and leaves little room for cancellations unless the South American versus US price structure changes very soon.
· Weekly meal sales were quite strong at almost nine times the amount needed to sell each week to hit the USDA yearly sales target. 98% of yearly sales are already on the books with 26 weeks left in the marketing year.
· Bean oil sales were offset by a larger amount of cancellations.
· Total unsold and unshipped meal and oil sales are large, and allow for the possibility of cancellations should the South American versus US price structure change.
CORN
Total old and new crop corn sales were within analyst’s guesses.
Old crop weekly corn sales were over the weekly average needed to hit the USDA target.
The USDA reduced their expectation for corn exports in both the February and March Supply/Demand reports, but corn sales and shipments are still well behind the average five year pace.
Shipments are running slow enough that there could be cancellations or a further reduction in the yearly export target if the price structure between South America versus US prices changed soon ie cheap South American corn encouraging US cancellations.
US domestic demand for feed and ethanol continue to pull US corn away from the export market. US corn exports account for a stunningly low 7% of total use.
WHEAT
· Weekly wheat sales were within above analysts’ guesses, but old crop sales were just half the amount need to be sold each week to hit the USDA export estimate. Note that there are just 9 weeks left in the marketing season.
· Pricing wheat near corn values has encouraged both domestic and export demand. The drop in futures prices after last week’s report allowed US wheat to become even more competitive in the export market.
· Total wheat sales and shipments continue run well behind the five year average pace.
· SRW sales were equal to the amount needed to average to hit the USDA export target.
· The pace of HRW sales slowed last week to just below the rate need to hit the yearly export target. HRW sales are running behind the pace needed to hit the USDA yearly export target.
· There were more HRS cancellations than sales, but 96% of expected sales are already on the books.

Week of 4.01.13
Thur 4.04 7:30 am Export Sales
Fri 4.05 Commitment of Traders report

Week of 4.08.13
Sun 4.07 7:00 pm NEW CBT HOURS START – electronic trade opens
Mon 4.08 7:45 am Electric trade pauses
8:30 am Pit opens and Electronic trade resumes
10:00 am Export Inspections
1:15 pm Pit and Electronic trade closes
3:00 pm Weekly Crop Progress Report
7:00 pm Electronic trade opens
Tues 4.09 3:30 pm API Energy Stocks
Futures Delivery Stocks
Wed 4.10 9:30 am EIA Energy Stocks
11:00 am USDA Supply/Demand Report
Thur 4.04 7:30 am Export Sales
Fri 4.05 Commitment of Traders report