From The Floor-An Afternoon Recap 11/11/15

News:

Egypt GASC bought 120,000 tons of wheat for December shipment

  • 60,000 tons of wheat from Russia
  • 60,000 tons of wheat from France

Yesterday Egypt GASC bought 115,000 tons of wheat for December shipment from Russia and the Ukraine  

China Cabinet said they will increase policy support for financial sector

China Cabinet said they will improve subsidy policy for corn and soybeans

China Cabinet said they will support increase of imports of popular consumer goods

Talk / reports that shipping delays in Brazil are causing some corn cargoes to be switched to the PNW

  • Brazil has shipped about 920,000 tons of corn so far in November
  • Brazilian corn lineup as of yesterday was 7.077 million tons
  • Reports that waiting times are at least 30 days.

Analysts estimating as of yesterday that US farmers had only sold 30-35% of their corn and bean crops.

Some analysts are talking about $8 or lower soybeans, but not until South American bean crop is confirmed around February-March

Concerns about dryness in Black Sea region continues

Ukraine Ag Min said Ukraine has harvested 10.9 MMT of sunflower seed, or 99% of total sunflower seed area , a year ago Ukraine harvested 9.7 MMT of sunflower seeds

  • Sunflower seed yield at 2.18 TPH vs. 1.94 TPH a year ago

Ukraine Ag Min said Ukraine has harvested 3.67 MMT of soybeans , or 97% of total soybean area , a year ago Ukraine harvested 3.9 MMT of soybeans

Argentina Ag Min – Argentina farmer selling as of November 4th

  • ‘15/16 wheat crop 4.98% sold vs. 13.14% a year ago
  • ‘14/15 wheat crop 106.35% sold vs. 77.24% a year ago
  • ‘15/16 corn crop 3.35% sold vs. 3.04% a year ago
  • ‘14/15 corn crop 81.21% sold vs. 85.37% a year ago
  • ‘15/16 bean crop 3.32% sold vs. 2.27% a year ago
  • ‘14/15 bean crop 74.92% sold vs. 67.53% a year ago

Global Grain conference in Geneva continues.

  • Hightower Report president said to short soybean meal and take long positions in bean oil

o   He expects El Nino will raise demand for bean oil , which would lead to higher prices . Due to El Nino, expecting lower production for palm oil this year  out of Malaysia and Indonesia.

o   He said soybean meal is one of the most oversupplied commodities

o   He said historical lows will be reached in grain markets over the next few months

o   He expects India’s and China’s demand for ethanol will surge

Japan bought 22,895 tons of feed wheat via SBS tender for Jan shipment

Japan seeks 120,000 feed wheat and 200,000 tons of barley via SBS tender for Jan shipment

Brazilian truckers strike continues , but most  Brazilian roads are opened as government increased fines for blocking roads.

US government was closed today for Veteran’s Day holiday. US government returns tomorrow. Some weekly US reports have been delayed due to government holiday.

Today was the fourth day Goldman Sachs / UBS roll. Roll ends tomorrow. They are rolling long December corn and wheat positions to March.

  • GS / UBS has already rolled their long December bean oil and soy meal positions to January during the November soybean roll.

Estimated fund activity:

  • Wheat bought 4,000
  • Corn bought 10,000
  • Beans bought 3,000
  • Meal bought 2,000
  • Bean oil sold 2,000

Upcoming reports/events:

  • India closed again tomorrow for holiday. India returns Friday.
  • Weekly US jobless claims report comes out tomorrow at 730 am CST
  • Weekly DOE energy inventory report will come out tomorrow at 10 am CST . Expecting

o   Crude a build of 1.3 million barrels

o   Gas a draw of 1.0 million barrels

o   Distillates a draw of 1.0 million barrels

  • Weekly US ethanol plant production report will come out tomorrow at 10 am CST
  • Weekly US export sales report comes out on Friday at 730 am CST
  • Weekly Nat Gas storage report will come out on Friday at 930 am CST , expecting +52 BCF
  • Hearing Informa comes out on Friday at 1030 am CST with their updated US 2016 acreage estimates. Previous estimates from Informa were

o   2016 US corn planted area previously estimated at 90.8 million acres

o   2016 US bean planted area previously estimated at 83.9 million acres

o   2016 US all wheat planted area previously estimated at 54.0 million acres

  • November beans and rice expire on Friday at noon CST
  • Weekly COT report comes out Friday at 230 pm CST
  • G20 summit in Antalya Turkey will take place on Sunday and Monday
  • Surveyors SGS and Intertek to estimate Malaysia’s Nov 1-15th palm oil exports on Monday
  • NOPA October crush report comes out on Monday at 11 am CST

Option players:

  • FI bought 3,000 March bean 920 call and sold 3,000 March bean 800 put combos at 7/8 credit , tied to March futures at 855
  • RJO bought 1,000 March bean 800 puts at 9 3/8 -9 ½
  • Rosenthal sold 1,000 Jan bean 850-820 put spreads at 8 ¾
  • ABN sold 1,000 Dec soybean 860 straddles at 17-17 ½
  • FI sold 1,500 Dec corn 360 straddles at 8 5/8-8 ¾
  • ABN bought 1,000 March corn 360 puts at 11 ¼
  • ICAP bought 1,000 Dec corn 360 straddles at 8 5/8-8 ¾
  • ICAP sold 1,000 March corn 390 calls at 8 ½
  • RJO bought 1,000 Jan corn 370 calls at 8 5/8
  • RJO bought 1,000 week 1 corn 370-380 put spreads at 6 5/8
  • FI bought 500 Jan wheat 520 calls sold 500 Feb wheat 480 puts at 5 tied to March futures at 497
  • RJO bought 400 Dec wheat 470 puts at 7/8
  • Rosenthal bought 1,000 Dec KC wheat 450 puts at 2 ¼ -2 ½
  • RJO bought 700 Dec soymeal 300 puts and sold 700 week 1 soymeal 295 puts at 2.25 debit
  • RJO bought 500 Dec meal 310 puts and sold 500 week 1 soymeal 305 puts at 4.25 debit
  • Drax bought 1,000 Jan bean oil 2850 calls,  sold 2,000 Jan bean oil 30 calls , and bought 1,000 Jan bean oil 32 calls at 17 debit
  • Drax bought 500 March bean oil 2850 calls at 90
  • Drax bought 500 Jan 2850-30 call spreads at 30
  • RJO bought 700 Jan bean oil 27 puts at 57
  • RJO bought 700 Jan bean oil 27-26 put spreads and sold 700 Jan bean oil 30 calls at 20 tied to Jan futures at 2755

Closing vols and ATM straddles:

Corn:

Z15 360 8 / 8.50 17.25%

F16 370 18 / 18.50 17.75%

G16 370 26.50 / 27.25 20.50%

H16 370 31.50 / 32.25 20.50%

K16 380 42.50 / 43.25 21.00%

N16 380 51 / 52 21.75%

Z16 390 67.50 / 68.50 21.50%

Beans:

Z15 860 16 / 17 16.75%

F16 860 35 / 36 16.00%

H16 860 58 / 59 16.25%

K16 860 72.50 / 74 16.00%

N16 860 88 / 90 16.50%

Q16 880 95 / 100 16.75%

U16 880 100 / 105 17.00%

X16 880 112 / 114 16.75%

Wheat:

Z15 490 13 / 14 26.00%

F16 490 29 / 31 22.00%

H16 490 47.50 / 49.50 23.00%

K16 500 65 / 66 24.00%

N16 500 78 / 80 24.50%

KC Wheat:

Z15 460 13 / 14.50 25.50%

F16 470 27 / 29 21.75%

H16 470 45 / 47 23.50%

K16 490 60 / 63 24.00%

N16 500 78 / 80 24.50%

Minneapolis wheat:

Z15 500 12 / 14 19.00%

H16 510 40 / 44 20.00%

K16 520 58 / 62 22.00%

N16 530 72 / 76 23.00%

Meal:

Z15 290 6.25 / 7.25 18.00%

F16 290 13.50 / 14.50 17.00%

H16 290 21.50 / 22.50 18.00%

K16 290 27.50 / 28.50 18.00%

N16 290 31.50 / 33.00 17.75%

Bean oil:

Z15 27.50 70 / 85 21.50%

F16 27.50 150 / 165 20.50%

H16 28.00 240 / 260 21.50%

K16 28.00 305 / 325 21.25%

N16 28.00 355 / 375 21.00%

Crush quotes:

               Open                     Closes

Dec        75.5-80.0              75.5-79.0

JanDec  86.5-87.0             84.5-85.5

Jan         89.5-90.0              88.0-88.5

Mch       89.0-89.5              88.5-89.0

May       85.5-86.5              85.0-85.5

Jly           84.0-85.0              83.5-84.5

Aug        85.0-86.0              84.0-86.5

Sep        85.0-92.0              85.5-92.0

Oct         81.0-85.0              80.5-83.5

Dec        84.0-87.0              84.0-85.0

NovSep83.0-86.0              82.5-85.5

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