KNIGHT AM GRAIN FUTUES COMMENTS WEDNESDAY 4.10.13

AM GRAIN FUTURES COMMENTS Wednesday 4.10.13

Grain futures prices are mixed with corn and wheat close to unchanged, while wheat is about a nickel lower. Traders are taking profit/squaring up before the USDA issues it’s April Supply/Demand report at 11 am. The trade is expecting “conservative revisions” in carryover following the Quarterly Stocks report two weeks ago that showed more than expected second quarter stocks – and particularly higher corn stocks.
It will be hard for this report to be wildly bullish or bearish given recent history, so the mostly likely result of the report will be to further define an old crop trading range until the impact of huge newly harvested South American corn and beans are no longer weighing on the general price level. Traders expect to see a reduction in the production numbers for South America in this report, so that may help the futures market to rebound from recent lows.
The next focus of the market will be new crop production and the May S+D’s which will report the USDA’s first take on the 2013-14 supply/demand balance. The recent planting report show corn and bean acres not too much different than this year’s planted acres, but more than expected corn acres and much less than expected bean acres. So far the cool, wet spring is delaying corn planting, but not yet enough to expect a large acreage shift from corn to beans.
The question for the marketplace will be should the general price level reflect old crop or new crop supply/demand balances. Changes in either old or new crop fundamentals could alternatively influence general prices levels as well as old crop versus new crop spreads. The South American harvest and the recent Quarterly Stocks numbers have squeezed risk premium out of old crop prices – and new crop needs risk premium until planting conditions improve and new crop has emerged.
– Helen Pound

GRAIN FUTURES 7:45 to 8:30 am PAUSE –rounded
CK SK SMK BOK WK KWK MWK
Today’s Pause $6.45 $13.95 $395 $0.5001 $7.04 $7.42 $7.96
Yesterday’s Settle $6.44 $13.96 $395 $0.4998 $7.09 $7.47 $8.00

OVERNIGHT PERCENT CHANGE IN FUTURES VALUES (8:30 am Central)
Grains Corn Beans Meal Oil W KC Mpls
% Daily Change
MAY 13 +0.5% -0.1% -0.1% +0.1% -0.7% -0.7% -0.5%
JULY 13 +0.1% -0.1% -0.1% +0.1% -0.7% -0.7% -0.5%
DEC 13 -0.2% -0.1% -0.1% +0.1% -0.6% -0.4% -0.8%

Macros Dollar 10 Yr S+P Crude Copper Gold Silver
% Daily Change +0.2% -0.2% +0.2% -0.7% -0.7% -0.6% -0.8%

2009 INDEX (based on January 2, 2009)
Grains Corn Beans Meal Oil Chi Wht KC Mpls
Index 156% 144% 131% 87% 115% 117% 122%
Year Low 134% 113% 91% 82% 93% 95% 111%
Year High 205% 185% 184% 100% 155% 150% 158%

Macros Dollar 10 Yr S+P Crude Copper Gold Silver
Index 99% 107% 169% 202% 256% 179% 241%
Year Low 90% 103% 115% 162% 245% 173% 229%
Year High 101% 110% 159% 239% 296% 205% 324%

MAY FUTURES DELIVERIES – First Notice Day is Tuesday 4.30.13
C S SM BO MW KW W
K-N Spread (16 3/4) (25 ) (0.8) 0.19 (1 1/4) 7 1/4 5 1/4
% Full Carry (120 %) (137 %) (12 %) 42 % (7 %) 47 % 38 %

Open Interest 348,851 202,037 84,477 119,817 15,199 60,068 127,990
Change -25,578 -16,574 -9,815 -12,204 -857 -4,322 -12,352

Delivery Stocks 1.8 1.3 21.1 70.1 47.9

Registrations 66 0 0 12,237 1153
Deliveries, Open Interest and Registration in number of 5,000 bushel contracts
Delivery Stocks in million bushels – reported each Tuesday
Last trading day is Tuesday 5.14.13

UPCOMING REPORTS
Week of 4.08.13
Wed 4.10 9:30 am EIA Energy Stocks
11:00 am USDA Supply/Demand Report
Thurs 4.04 7:30 am Export Sales
Fri 4.05 Commitment of Traders report
Week of 4.15.13
Mon 4.15 7:30 am NOPA Crush
10:00 am Export Inspections
3:00 pm Weekly Crop Progress Report
Tues 4.16 3:30 pm API Energy Stocks
Futures Delivery Stocks
Wed 4.17 9:30 am EIA Energy Stocks
Thurs 4.18 7:30 am Export Sales
Fri 4.19 2:00 pm Cattle on Feed report
2:00 pm Commitment of Traders report
Week of 4.22.13
Fri 4.26 May Grain Options Expiration
Week of 4.29.13
Tues 4.30 First Notice Day May Grain Futures Deliveries

APRIL 2013 USDA SUPPLY/DEMAND REPORT – ESTIMATES

US CARRYOUT (billion bushels)
2012-13
APR Average Range MCH FEB 2011-12 2010-11
CORN 0.824 0.625-0.925 0.632 0.632 0.989 1.128
BEANS 0.137 0.107-0.160 0.125 0.125 0.169 0.215
WHEAT 0.731 0.700-0.776 0.716 0.691 0.743 0.862

WORLD CARRYOVER (mmt)
2012-13
APR Average Range MCH FEB 2011-12 2010-11
CORN 120.2 116.0-125.0 117.48 118.04 131.0 127.9
BEANS 60.1 58.2-62.0 60.21 60.1 55.2 69.9
WHEAT 178.6 176.9-180.0 178.2 176.7 196.5 198.0

SOUTH AMERICAN PRODUCTION (mmt)
2012-13 Range
APR Average MCH FEB 2011-12 2010-11
CORN
Brazil 72.9 71.95-75.0 72.5 72.5 73.0 57.5
Arg 25.7 25.0-26.5 26.5 27.0 21.0 22.5

BEANS
Brazil 82.8 81.0-83.7 83.5 83.5 66.5 75.5
Arg 50.6 49.0-52.0 51.5 53.0 40.1 49.0

CARRYOVER AS A PERCENT OF USE –
Mch Feb Jan Dec ’11-12 ’10-11 09-10
WORLD
Coarse Grains 12 % 12 % 11 % 12 % 13 % 13 % 16 %
Beans 17 % 17 % 16 % 17 % 16 % 20 % 18 %
Wheat 22 % 22 % 22 % 22 % 23 % 25 % 25 %
US
Corn 6 % 6 % 5 % 6 % 8 % 9 % 13 %
Beans 4 % 4 % 4 % 4 % 5 % 7 % 4 %
Wheat 30 % 28 % 30 % 32 % 33 % 36 % 48 %
WHEAT BY CLASS
HRW 33 % 29 % 28 % 26 % 37 % 38 % 49 %
HRS 35 % 34 % 32 % 33 % 32 % 29 % 47 %
Durum 31 % 33 % 33 % 35 % 26 % 25 % 26 %
SRW 23 % 27 % 37 % 52 % 39 % 51 % 66 %
White 18 % 14 % 19 % 18 % 19 % 31 % 35 %

HEADLINES

04/10 06:49a CST DJ Japan Cancels SBS Tender to Import Feed Wheat, Barley
– Lack of selling interest

04/10 05:40a CST DJ Japan Makes Rare Purchase of S. Africa Corn on U.S. Drought, Brazil Port Congestion
– May/June

04/10 05:14a CST *DJ Japan Plans to Buy 600,000 Tons Corn for May-June Shipment

Back Office Minneapolis | Helen Pound