News From The Grain Floor 10/23/14

Good morning.

 

The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’

–          Ronald Reagan

 

USDA announced 118,000 tons of US beans sold to China for ‘14/15 shipment

 

Overnight closes

  • SX up 3 ¼ at 966
  • SF up 3 at 972 ¾
  • CZ up ¾ at 353 ¾
  • WZ up 1 at 523 ½
  • KC WZ down 1 ½ at 603 ¾
  • MWZ up 1 ¼ at 570
  • SMZ up 1.20 at 339.20
  • BOZ up 24 at 3238
  • RRF unchanged at 1274

 

Overnight volume

  • SX 16,736
  • SF 12,128
  • CZ 9,880
  • WZ 4,489
  • KC WZ 939
  • MWZ 168
  • SMZ 4,639
  • BOZ 7,969
  • RRF 61

 

Opening calls

  • Beans 3-5 higher
  • Corn steady to 2 higher
  • Wheat steady to 2 higher
  • KC wheat 1-2 lower
  • Minneapolis wheat 1-2 higher
  • Meal .50-1.50 higher
  • Bean oil 20-30 higher
  • Rice steady mixed

 

Crude, dollar, and stock market higher. Gold and silver lower.

 

Nikkei down .37%

Hang Seng down .3%

Shanghai Index down .9%

 

Weekly US jobless claims report came out this morning at +17K to 283K expecting 282K

 

October Flash manufacturing PMIs

  • Eurozone at 50.7 expecting 49.9 and vs. September final of 50.3
  • German at 51.8 expecting 49.5 and vs. September final of 49.9
  • French at 47.3 expecting 48.5 and vs. September final of 48.8
  • China HSBC flash at 50.4 (3 month high) vs. September final of 50.2
  • Japan at 52.8 vs. September final of 51.7

 

China grain closings = beans down 8, corn up 5, meal down 24, bean oil up 60, and palm oil up 38

 

Malaysian palm oil up 36

 

Talk/Reports 2-4 US meal cargoes were switched to Argentine meal. South American meal is much cheaper than US meal.

 

Hearing China bought 4 US bean cargoes off the Gulf yesterday 1 for December shipment and 3 for January shipment.

 

Hearing China bought 6-8 Brazilian bean cargoes for March-May shipment.

 

Reports China bought a bunch of palm oil over the past two days. No volume estimate was given.

 

Japan bought 109,715 tons of food wheat for Nov-Dec shipment. Breakdown

  • 24,620 tons of western white US wheat
  • 30,830 tons of HRW US wheat
  • 32,795 tons of dark northern spring US wheat
  • 21,470 tons of Australian white wheat

 

Turkey bought 5,000 tons of Russian origin corn

 

Turkey bought 3,000 tons of Russian origin wheat

 

Israel bought 5,000 tons of Ukraine wheat for November shipment

 

Tunisia seeks 12,000 tons of soymeal for Jan shipment

 

Taiwan seeks 41,250 tons of US milling wheat for December shipment

 

China imported 539,000 tons of DDGs in September down 11% from August.

 

Argentina government approves additional 400,000 tons of wheat exports and 500,000 tons of corn exports.

 

Cerealpar (Brazil trading firm) said Brazilian farmers there were still holding their beans hoping for higher prices but said they would become motivated sellers in Nov and Dec to cover their costs for planting the next crop.

 

Reports of good corn yields in the EU

 

Rains in Brazil overnight with more rains in the forecast.

 

Somar said Brazil’s Mato Grosso to see up to 4 inches of rain over the next two weeks

 

Favorable US Midwest harvest weather.

 

Dry weather in parts of Russia’s wheat areas, rain is needed.

 

2 rice receipts were canceled yesterday afternoon

 

Weekly US export sales report

  • Wheat = ‘14/15 299,400 tons (expecting 350- 500,000 tons)
  • Corn = ‘14/15 1.03 million tons (expecting 800,000- 1.0 M tons)
  • Beans = ‘14/15 2.17 million tons ‘15/16 3,300 (expecting 800,000- 1.0 M tons)
  • Meal = ‘14/15 23,000 tons (expecting 150- 250,000 tons)
  • Bean oil = ‘14/15 10,600 tons (expecting 10- 50,000 tons)

 

Export highlights

  • Wheat – Net sales of 299,400 metric tons for delivery in the 2014/2015 marketing year were down 34 percent from the previous week and 39 percent from the prior 4-week average.  Increases were reported for Japan (92,300 MT), the Philippines (68,700 MT, including 59,500 MT switched from unknown destinations), South Korea (52,000 MT), the Dominican Republic (35,100 MT), Nigeria (27,500 MT), Ecuador (17,000 MT, including 18,000 MT switched from unknown destinations and decreases of 1,000 MT), and Costa Rica (8,200 MT, including 8,000 MT switched from Guatemala and decreases of 200 MT).  Decreases were reported for unknown destinations (8,200 MT), the French West Indies (8,000 MT), and Guatemala (8,000 MT).  Exports of 431,700 MT were down 11 percent from the previous week and 21 percent from the prior 4-week average.  The primary destinations were the Philippines (128,200 MT), Japan (108,000 MT), Taiwan (39,400 MT), Mexico (39,300 MT), Brazil (38,800 MT), Venezuela (20,000 MT), and Ecuador (17,000 MT).
  • Corn – Net sales of 1,031,200 MT for 2014/2015 were down 46 percent from the previous week and 1 percent from the prior 4-week average.   Increases were reported for unknown destinations (576,200 MT), Japan (167,300 MT, including 63,700 MT switched from unknown destinations), Jamaica (86,400 MT), Peru (43,100 MT, including 30,000 MT switched from unknown destinations), Colombia (42,400 MT, including 12,000 MT switched from unknown destinations), and the Dominican Republic (23,000 MT).  Decreases were reported for Vietnam (3,900 MT) and Guatemala (3,600 MT).  Exports of 676,700 MT were primarily to Mexico (194,400 MT), Colombia (111,100 MT), Japan (106,900 MT), Venezuela (64,000 MT), and Peru (50,500 MT).
  • Beans – Net sales of 2,166,800 MT for 2014/2015 were reported primarily for China (1,701,400 MT, including 177,300 MT switched from unknown destinations and decreases of 7,700 MT), Spain (138,000 MT, including 62,000 MT switched from unknown destinations and decreases of 1,000 MT), Taiwan (86,000 MT, including 59,000 MT switched from unknown destinations), Turkey (64,900 MT, including 30,000 MT switched from unknown destinations and decreases of 4,100 MT), and the United Kingdom (64,000 MT, including 60,000 MT switched from China).  Decreases were reported for unknown destinations (175,100 MT) and Thailand (2,600 MT).  Net sales of 3,300 MT for 2015/2016 were reported for Japan.  Exports of 1,880,100 MT were primarily to China (1,313,200 MT), Taiwan (73,400 MT), Spain (73,000 MT), Mexico (72,600 MT), and Turkey (70,900 MT).
  • Meal – Net sales of 23,000 MT for 2014/2015 resulted as increases for Panama (34,300 MT, including 9,300 MT switched from unknown destinations), the Dominican Republic (32,500 MT), Venezuela (27,500 MT, including 26,000 MT switched from unknown destinations), Canada (15,300 MT), and Colombia (9,100 MT), were partially offset by decreases for unknown destinations (77,700 MT) and Mexico (61,000 MT).   Exports of 142,600 MT were reported to Venezuela (48,000 MT), the Dominican Republic (21,200 MT), Guatemala (18,400 MT), Canada (16,600 MT), and Panama (9,300 MT).  
  • Bean oil – Net sales of 10,600 MT for 2014/2015 resulted as increases for South Korea (11,000 MT, switched form unknown destinations), Peru (6,000 MT), Mexico (5,300 MT), the Dominican Republic (2,200 MT), and Colombia (1,000 MT), were partially offset by decreases for unknown destinations (17,000 MT).  Exports of 24,400 MT were reported to South Korea (11,000 MT), Guatemala (7,000 MT), Jamaica (4,000 MT), and Mexico (1,300 MT).

 

Moving averages

  • Dec corn 50 day 347 ½
  • Dec wheat 50 day 516 ½
  • Dec KC wheat 50 day 600
  • Dec Minneapolis wheat 50 day 579 ½
  • Dec bean oil 50 day 3262
  • Dec meal 50 day 329.00
  • Dec meal 100 day 347.90

 

Open interest as of yesterday’s close

  • Total corn 1,292,431 open, down 3,113
  • Total beans 781,867 open, down 15,104
  • Total meal 356,767 open, down 4,861
  • Total bean oil 395,950 open, down 144
  • Total wheat 419,099 open, up 3,698
  • Total KC wheat 156,810 open, up 2,405

 

Upcoming reports/events

  • Weekly EIA Nat Gas storage report comes out today at 930 am CST , expecting +98 BCF
  • November options expire tomorrow at 115 pm CST.
  • Weekly COT supplemental report comes out tomorrow at 230 pm CST.
  • Surveyors SGS and Intertek will estimate Malaysia’s Oct 1-25th palm oil exports on Monday.
  • FOMC two day policy meeting begins Tuesday Oct 28th
  • Fed announcement on Wednesday Oct 29th at 1 pm CST.
  • Thursday October 30th is position day for November bean and rice futures. Traders should be out of long positions by the close on this day, or risk delivery
  • First notice day for November futures is October 31st
  • CME daily grain price limits set to decline on Sunday November 2nd. See link
  • Deutsche Bank roll begins Tuesday November 4th and runs for 5 days. They will be rolling long Dec 2014 corn positions into Dec 2015 corn.
  • USDA to restart monthly US ethanol reports in February 2015
  • USDA to restart month Census crush reports in July 2015

 

Data sources: DowJones , Bloomberg, Reuters , DTN news, barchart.com and CME Group, NYSE