From The Floor-An Afternoon Recap 10/20/15

Good soybean demand from China continues.

Somar forecasting 1-2 inch rains next week for Mato Grosso

Ukraine Ag Min said Ukraine’s 2016 winter wheat area could fall to 5.5 MH vs. previous estimate of 6.2 MH

Russia exported 2.0 MMT of grain, including 1.3 MMT of wheat , between October 1-19th

Russia exported 13.6 MMT of grain, including 10.0 MMT of wheat , between July 1-October 19th

Jordan canceled tender to buy 100,000 tons of optional origin hard wheat

US Wheat Associates said on their website that US hard red winter wheat average protein is 12.4% which is lower than 5 year average.

US Wheat Associates said on their website the US HRW wheat average test weight is 59 lbs./bushel , also below the 5 year average

US Wheat Associates said on their website the US hard red spring wheat average protein is 14.1% vs. 13.6% a year ago

Japan use of corn in animal feed in August was 45.7% vs. 45.0% a year ago

Britain’s Farm Ministry estimated 2015 UK wheat crop at 16.17 MMT vs. previous estimate of 16.13 MMT and vs. 2014 wheat crop of 16.61 MMT

Britain’s Farm Ministry estimated 2015 UK rapeseed crop at 2.32 MMT down 5.6% from 2014

Cordonnier’s weekly crop report

  • ‘15/16 Brazilian bean crop estimated at 100.0 MMT , unchanged from his previous estimate
  • ’15/16 Brazilian total corn crop estimated at 81.2 MMT , unchanged from his previous estimate
  • ‘15/16 Argentine soybean area estimated at 20.9 MH up 2% from a year ago , but said this estimate may be too high
  • ‘15/16 Argentine soybean crop estimated at 60.0 MMT , unchanged from his previous estimate , but said this estimate may be too high
  • Said ‘15/16 Argentine corn area remains unknown, said it could be down 15 – 40% from ‘14/15 area
  • Estimated ‘15/16 total South American bean crop at 175.3 MMT , unchanged from his previous estimate
  • Estimated ‘15/16 total South American corn crop at 107.1 MMT , unchanged from his previous estimate
  • Estimated US 2015 bean yield at 47.2 BPA unchanged from previous estimate
  • Estimated US 2015 corn yield at 167.5 BPA unchanged from previous estimate

Chinese industry analysts –weekly Chinese crush breakdown:

  • For the week Oct 10-16 total crush volume at 1,673,600 tons up 61.98% from a week ago
  • For the week Oct 10-16 total crush capacity utilization at 53.24% up 20.3% from a week ago
  • Total ‘15/16 (Oct 1-16) crush volume at 3,001,600 tons up 3.19% from a year ago
  • Total 2015 (Jan 1-Oct 16) crush volume at 61,359,700 tons up 9.41% from a year ago
  • As of Oct 16th total imported soybean stocks at 6.0602 million tons down 4.22% from a week ago and up 13.89% from a year ago
  • Estimated October bean imports at 6.0265 MMT unchanged from previous estimate
  • Estimated November bean imports at 7.00 MMT unchanged from previous estimate
  • Estimated December bean imports at 7.20 MMT vs. previous estimate of 7.00 MMT
  • Estimated January bean imports at 6.20 MMT vs. previous estimate of 6.00 MMT

Estimated fund activity:

  • Wheat bought 4,000
  • Corn bought 8,000
  • Beans bought 7,000
  • Meal sold 2,000
  • Bean oil bought 3,000

Upcoming reports/events:

  • Weekly API energy inventory report comes out today at 330 pm CST.
  • OPEC and non-OPEC countries meet in Vienna tomorrow
  • Weekly DOE energy inventory report comes out tomorrow at 930 am CST. Expecting

o   Crude a build of 3.5 MB

o   Gas a draw of 1.0 MB

o   Distillates a draw of 1.2 MB

  • Weekly US ethanol plant production report comes out tomorrow at 930 am CST
  • ECB meets on Thursday
  • BOJ meets on Friday October 30th

Option players:

  • TJM sold 1,500 Jan bean 900-880 put spreads and bought 1,500 Jan bean 840-820 put spreads at 6 1/8 -6 ½ credit
  • EDF Mann bought 800 May bean 980-1020 call spreads at 7 ¼ tied to May futures at 908 ½
  • RJO bought 1,000 Jan bean 800 puts at 1 ¾
  • FI bought 1,000 Jan bean 940 calls at 11 ¼ tied to Jan futures at 904
  • RJO bought 1,500 Dec corn 370 puts at 6 ¼ tied to Dec futures at 375
  • JP Morgan sold 600 March corn 400 calls at 12 ¼ -13
  • Rosenthal bought 600 March wheat 460 puts at 10 ½ tied to Dec futures at 487
  • FI sold 1,000 Jan soy meal 280 puts at 1.20
  • RJO bought 400 Dec soy meal 300 puts at 2-2.75
  • Drax bought 2,000 Jan bean oil 30-32 call spreads and sold 2,000 Jan bean oil 27 puts at even tied to Jan futures at 2875
  • ABN sold 500 Dec bean oil 29 calls at 60 tied to Dec futures at 2855
  • ABN bought 1,300 Jan bean oil 29 calls and sold 1,300 Dec bean oil 28 calls at even -2 credit

Closing vols and ATM straddles:

Corn:

X15 375 11.50 / 13 18.75%

Z15 375 17 / 17.50 19.50%

F16 390 24 / 25 18.50%

H16 390 36.50 / 37.50 20.50%

K16 390 46 / 47 21.00%

N16 400 56 / 57 21.75%

U16 400 66 / 67.50 22.75%

Z16 400 71.25 / 72.25 21.50%

Z17 400 89 / 93 19.75%

Beans:

X15 900 11 / 13

Z15 900 33 / 35 16.25%

F16 900 48 / 50 16.00%

H16 900 69 / 71 16.75%

K16 900 84 / 87 16.50%

N16 900 98 / 102 16.50%

U16 900 109 / 114 16.75%

X16 900 117 / 122 16.75%

Wheat:

X15 490 8 / 9 20.00%

Z15 490 24.75 / 26 22.00%

H16 490 50 / 52 23.00%

K16 500 64 / 66 23.00%

N16 500 77 / 79 23.75%

KC Wheat:

X15 470 7 / 9 20.00%

Z15 470 23 / 25.50 22.00%

H16 490 49 / 52 22.50%

K16 500 64 / 67 23.50%

N16 510 77 / 80 23.75%

Minneapolis wheat:
Z15 505 22 / 26 20.00%

H16 520 45 / 49 20.00%

K16 530 58 / 62 20.00%

N16 540 72 / 77 21.50%

Meal:

X15 310 4.0 / 5.0

Z15 310 13.0 / 14.0 18.50%

F16 310 18.5 / 19.5 18.25%

H16 310 26.0 / 27.0 18.50%

K16 310 30.5 / 32.0 18.00%

N16 310 35.5 / 37.5 18.00%

Q16 310 37.5 / 39.5 18.00%

U16 310 39.5 / 41.5 17.75%

V16 310 39.0 / 42.0 17.25%

Z16 310 42.0 / 45.0 16.75%

Bean oil:

X15 28.5 45 / 65

Z15 28.5 155 / 175 23.50%

F16 29.0 210 / 230 22.25%

H16 29.0 275 / 305 21.75%

K16 29.0 330 / 370 21.00%

N16 30.0 380 / 420 20.25%

Q16 30.0 390 / 430 20.00%

U16 30.0 400 / 440 19.75%

V16 30.0 410 / 460 19.75%

Z16 30.0 440 / 490 19.00%

Closing crush quotes

DEC

99.50

100.00

FZZ

94.50

95.25

JAN

96.00

96.50

MCH

90.50

91.00

MAY

84.50

85.00

JULY

80.50

81.50

AUG

80.25

82.75

SEP

85.25

92.00

OCT16

83.25

86.50

DEC16

84.00

86.00

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