KNIGHT AM GRAIN FUTURES COMMENTS THURSDAY 4.11.13

AM GRAIN FUTURES COMMENTS Thursday 4.11.13

Grain futures are trading higher – but within yesterday’s ranges. With so many unusual changes in yesterday’s S+D report, traders are continuing to digest the report and search for futures price support and resistance.
There continues to be focus on liquidation and forward roll of May futures contracts. Open interest has been declining quickly, especially in the beans and corn where there may be no cash deliveries against the futures as basis levels are quite strong. Traders are scratching their heads on the question of WK deliveries as relatively cheap basis levels and very large stocks suggest deliveries, but commercials may want to hold on to wheat stocks just in case tight old crop corn supplies or summer weather reduces new crop corn yield prospects.
The USDA finally announced a new crop SRW to China – the quantity is smaller than expected but may be only part of the deal.
– Helen Pound

WEEKLY EXPORT SALES REPORT
BEANS
• Total weekly bean sales were below the range of analysts’ estimates.
• Old crop bean sales rate was well above – 12 times- 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 21 weeks to hit the USDA target for the year.
• The pace of shipments also exceeds the average five year pace with 91% 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 16 times the amount needed to sell each week to hit the USDA yearly sales target. 96% of yearly sales are already on the books with 25 weeks left in the marketing year.
• Bean oil sales improved this week, but were still slightly less than the amount needed to sell each week to hit the USDA target for the year.
• 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 near the high end of analysts’ guesses.
• Old crop weekly corn sales were just under the weekly average needed to hit the USDA target.
• The USDA reduced their expectation for corn exports in the February, March and April Supply/Demand reports, but corn sales 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 just above the low end of analysts’ guesses, and old crop sales were just at the amount need to be sold each week to hit the USDA export estimate. Note that there are just 8 weeks left in the marketing season.
• Total wheat sales and shipments continue run well behind the five year average pace.
• SRW sales were twice the amount needed to average to hit the USDA export target.
• The pace of HRW sales picked up last week to the rate need to hit the yearly export target.
• There were more HRS cancellations than sales, but 96% of expected sales are already on the books.

2012-2013 EXPORT SALES (in Millions of bushels – rounded)
Week ended 4.04.13 CORN BEANS WHEAT
TOTAL WEEKLY SALES 19 14 13
TRADE ESTIMATE 10-20 18-30 11-29

WEEKLY SALES FOR 2012-13 7 12 10
(NEEDED TO HIT USDA EST) (9) (1) (10)

TOTAL SALES 618 1335 944
USDA ESTIMATE 800 1350 1025

PERCENT SOLD 77 % 99 % 92 %
5 yr Average percent Sold 84 % 92 % 100 %

UNSOLD 214 20 90
UNSHIPPED 166 103 165
POSSIBLE TO CANCEL/NOT SELL 384 135 274

PERCENT SHIPPED 57 % 91 % 76 %
5 yr Average percent Shipped 59 % 81 % 83 %

US CARRYOVER/USE % 7 % 4 % 30 %
WORLD CARRYOVER/USE % 12 % 18 % 23 %

USDA ESTIMATE OF US EXPORTS
AS A % OF US TOTAL USE 7 % 44 % 43 %
# weeks left in marketing year: wheat = 8 corn and beans = 21

Wheat sales: Nigeria, Philippines and others: new crop was sold to Mexico, South Korea and others
Corn sales: Mexico, Japan, Taiwan and others: new crop was sold to China, and others
Bean sales: China, Mexico, Japan and others; new crop was sold to Unknown and others

WHEAT SALES BY CLASS (in Millions of bushels – rounded)
HRW HRS DURUM SRW WHITE
WEEKLY SALES 5.4 -1.3 0 5 0.8
(NEEDED TO HIT EST) (5.5) (1.3) (1) (2) (1)

TOTAL SALES 356 215 17 189 167
USDA ESTIMATE 400 225 25 200 175

PERCENT SOLD 87 % 96 % 72 % 91 % 94 %

UNSOLD 44 10 8 16 9
UNSHIPPED 67 38 3 38 21
POSSIBLE TO CANCEL/NOT SELL 111 49 11 54 30

CARRYOVER/USE % 36 % 37 % 27 % 23 % 16 %

MEAL AND OIL SALES (in 000 mt)
MEAL OIL
TOTAL WEEKLY SALES 227 8
(NEEDED TO HIT USDA EST) (14) (9)

TOTAL SALES 8123 821
USDA ESTIMATE 8482 1043

PERCENT SOLD 96 % 79 %
5 yr Average percent Sold 78 % 76 %

UNSOLD 359 222
UNSHIPPED 1433 121
POSSIBLE TO CANCEL/NOT SELL 1792 343

PERCENT SHIPPED 79 % 67 %
5 yr Average percent Shipped 59 % 60 %

US CARRYOVER/USE % >1 % 8 %
WORLD CARRYOVER/USE % 4 % 6 %

USDA ESTIMATE OF US EXPORTS
AS A % OF US TOTAL USE 24 % 11 %
# weeks left in marketing year: 25

Meal sales: Unknown, Mexico, Venezuela and others
Oil sales: Small sales to a variety of destinations

GRAIN FUTURES 7:45 to 8:30 am PAUSE –rounded
CK SK SMK BOK WK KWK MWK
Today’s Pause $6.57 $13.94 $395 $0.4986 $7.01 $7.35 $7.87
Yesterday’s Settle $6.49 $13.93 $393 $0.5003 $6.97 $7.30 $7.85

OVERNIGHT PERCENT CHANGE IN FUTURES VALUES (8:30 am Central)
Grains Corn Beans Meal Oil W KC Mpls
% Daily Change
MAY 13 +1.2% +0.1% +0.5% -0.3% +0.5% +0.7% +0.4%
JULY 13 +0.9% -0.1% +0.2% -0.4% +0.5% +0.7% +0.4%
DEC 13 +0.1% -0.7% -0.5% -0.2% +0.5% +0.5% +0.5%

Macros Dollar 10 Yr S+P Crude Copper Gold Silver
% Daily Change -0.5% +0.1% +0.1% -0.2% -0.3% -0.1%

2009 INDEX (based on January 2, 2009)
Grains Corn Beans Meal Oil Chi Wht KC Mpls
Index 159% 144% 131% 86% 115% 116% 120%
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% 171% 204% 254% 177%
Year Low 90% 103% 115% 162% 245% 173% 229%
Year High 101% 110% 171% 239% 296% 205% 324%

MAY FUTURES DELIVERIES – First Notice Day is Tuesday 4.30.13
C S SM BO W KW MW
K-N Spread (19) (28 1/2) (2.1) 0.18 6 8 (3 1/4)
% Full Carry (136%) (156%) (32%) 40% 43% 52% (17%)

Open Interest 328,965 188,377 75,627 107,737 117,451 53,930 14,522
Change -19,254 -13,321 -8,663 -12,049 -10,311 -6,138 -677

Delivery Stocks 1.8 1.3 47.9 70.1 21.1

Registrations 44 0 0 12,237 1,153
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
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

HEADLINES

04/11 08:00a CST DJ USDA Says 360,000 Tons of SRW Wheat Sold to China in 2013-14

04/11 05:33a CST DJ Asian Wheat Buyers Accelerate Buying as Prices Fall
– Concern about lateness of spring wheat planting this year
– But can buy August from Black Sea at $45/ton cheaper than current Indian prices

04/11 04:25a CST DJ Japan Buys 120,108 Tons Milling Wheat in Tender – Official
– May/June
– More HRW than HRS

04/11 05:18a CST DJ EU’s 2013-14 Wheat Output Seen +5.3% at 139M Tons – USDA Attache

04/11 04:10a CST *DJ Bangladesh Buys 50,000 Tons Wheat at $311.45/Ton, C&F

04/11 03:52a CST DJ Ukraine 2013 Grain Harvest Seen Rising 15% on Year – Analysts

04/11 01:32a CST *DJ Taiwan Millers Buy HRW Grade Wheat at $330.45/Ton, FOB

04/11 01:32a CST *DJ Taiwan Millers Buy DNS Grade Wheat at $349.20/Ton, $343.10/Ton, FOB

04/11 01:30a CST *DJ Taiwan Millers Buy Western White Wheat at $307.97/Ton, FOB

04/11 01:21a CST *DJ Taiwan Flour Millers Buy U.S. Wheat 1st Time in 5 Weeks

Back Office Minneapolis | Helen Pound