From The Floor-An Afternoon Recap 11/17/15

News:

Rumors / talk this week that China may start auctioning rapeseed oil from reserves.

Favorable rains are in the forecast for most of Brazil’s main soybean and grain planting areas over the next two weeks.

  • Western and parts of central Mato Grosso and northwestern Mato Grosso do Sul forecast calls for hot temperatures and little rainfall over the next two weeks, expected to keep crop conditions poor in these areas during the next two weeks

Argentina weather forecast is favorable over the next two weeks

Much needed rainfall has been increasing in both Indonesia and Malaysia, easing earlier concerns of dryness and a decrease in palm oil production

Beneficial moisture with mild temperatures are in the forecast for Russian and Ukrainian wheat belts.

Eastern Australia also receiving beneficial rains

Rains in the 7-10 day forecast for South Africa , should improve planting outlook after delayed seasonal rains.

US weather forecaster said wheat conditions in the US , Canada, Europe , Australia , and China are favorable

Beneficial rains in US Plains seen aiding winter wheat crops

Safras e Mercado said as of November 13th Brazilian farmers have planted 56% of their bean crop vs. 42% a week ago and vs. 68% average

  • On Friday AgRural said Brazilian bean planting was 60% complete

Reports that Ukraine has lost 23% of their winter rapeseed, wheat, and barley  planted areas , only 7.23 million hectares are planted.

Ukraine plans to increase spring planting area by 27% to 8.27 million hectares

Some analysts estimated China’s November soybean imports at 7.2-8.0 MMT vs. 5.53 MMT in October

Oil World said in an emailed report today that states of Mato Grosso , Minas Gerais, Goias, and Bahia Brazil are still experiencing moisture deficits

  • These states make up for 45% of Brazil’s total soybean area
  • Below normal rainfall was received in these areas in September and October  , and if these areas receive below normal rainfall in November  , soybeans may be in trouble in central Brazil.

Oil World said in an emailed report today that Argentina elections may support soybean prices in the longer term

  • Oil World said Argentine farmers may switch soybean hectares to grain hectares
  • The removal of grain export tax would boost corn competiveness
  • Oil World said Argentina’s elections may not be as bearish for soybeans , as many analysts expect
  • Oil World said Argentina’s candidates have proposed ending export taxes on grains immediately , but soybean export taxes will be lowered or phased out more gradually

Cordonnier’s weekly crop report

  • Estimated ‘15/16 Brazilian bean crop at 100.0 MMT , unchanged from his previous estimate
  • Estimated ‘15/16 total Brazilian corn crop at 81.2 MMT , unchanged from his previous estimate
  • Estimated ‘15/16 Argentina bean crop at 58.0 MMT , unchanged from his previous estimate
  • Estimated ‘15/16 Argentina corn crop at 21.6 MMT , unchanged from his previous estimate

Argentina’s runoff presidential elections takes place on Sunday.

  • Analysts / traders are expecting Macri to win election
  • Expectations that new president will lower grain and soybean export taxes when they take office on December 10th

AHDB expects Britain’s 2016 wheat area will be basically unchanged to their area in 2015 of 1.83 million hectares  

AHDB expects Britain’s 2016 rapeseed area to fall by 14% from 2015

Vietnam customs data showed Vietnam exported 859,132 tons of rice in October up 82.9% from September

Vietnam customs data showed Vietnam exported 5.36 MMT of rice between Jan-October down 3.9% from a year ago

Estimated fund activity:

  • Wheat sold 5,000
  • Corn bought 2,000
  • Beans bought 3,000
  • Meal sold 500
  • Bean oil bought 2,000

Upcoming reports/events:

  • Weekly API energy inventory report comes out today at 330 pm CST.
  • Weekly DOE energy inventory report comes out tomorrow at 930 am CST. Expecting

o   Crude oil expecting a build of 2.0 million barrels

o   Gas expecting a draw of 1.5 million barrels

o   Distillates expecting a draw of 500,000 barrels

  • Weekly US ethanol plant production report comes out tomorrow at 930 am CST
  • Weekly EIA Nat Gas storage report comes out on Thursday at 930 am CST , expecting +22 BCF
  • See attachment for next week’s holiday trading hours schedule.

o   US grain markets will trade normal day session hours on Wednesday November 25th

o   US grain overnight markets will not open on Wednesday night.

o   US grain markets will be closed for the day and night session on Thursday November 26th (Thanksgiving).

o   US grain markets reopen on Friday November 27th at 830 am CST , but will close early at 12:05 pm CST .

Option players:

  • RJO bought 1,000 Jan bean 850 puts at 11 5/8 tied to Jan futures at 864
  • RJO bought 500 March bean 860 straddles at 59- 59 ¼
  • RJO bought 2,000 week one corn 370 puts at 8 ¾ -9
  • Macquarie sold 1,000 March corn 440 calls at 1 ¼
  • ABN bought 700 March corn 380-400 call spreads at 4 ¾ tied to March futures at 366.
  • ABN bought 500 March corn 390 calls at 6 ¾ tied to March futures at 366.
  • RJO sold 500 Dec wheat 480 puts at 1 ¾ tied to Dec futures at 487 ¾
  • ICAP sold 500 Dec wheat 480 puts at 1 ¾ tied to Dec futures at 488 ½
  • Rand bought 500 March meal 340 calls at 1.00
  • RJO bought 500 week one soy meal 295 puts at 8.20
  • Macquarie bought 500 Dec bean oil 27 puts at 9 tied to Dec futures at 2745

Closing vols and ATM straddles:

Corn:

Z15 360 4.50 / 5.50 17.50%

F16 370 16.25 / 17.25 17.75%

G16 370 24.75 / 25.50 20.00%

H16 370 29.50 / 30.25 20.00%

K16 370 38.75 / 39.75 20.25%

N16 380 49.50 / 50.50 21.25%

U16 380 60 / 61 22.75%

Z16  390 67 / 68 21.75%

Z17 400 84 / 88 19.25%

Beans:

Z15 860 11 / 13 18.00%

F16 860 34 / 36 16.00%

H16 860 59 / 61 17.00%

K16 860 73 / 75 16.50%

N16 880 90 / 92 16.75%

U16 880 104 / 108 16.75%

X16 880 112 / 117 16.75%

Wheat:

Z15 490 8.50 / 9.50 19.75%

F16 490 26 / 27.50 20.75%

H16 490 45 / 47 22.75%

K16 500 62 / 65 24.00%

N16 500 73 / 75 24.50%

KC Wheat:

Z15 460 7 / 9 22.50

F16 480 24 / 26 20.50%

H16 480 43 / 45 23.00%

K16 480 58 / 60 23.50%

N16 490 71 / 74 244.25%

Minneapolis wheat:

Z15 500 6 / 9 18.00%

H16 500 38 / 42 20.00%

K16 510 56 / 58 22.00%

N16 50 56 / 60 23.00%

Meal:

Z15 290 4.5 / 5.5 17.00%

F16 290 12.5 / 13.5 17.00%

H16 290 21.0 / 22.0 18.00%

K16 290 27.0 / 28.0 18.00%

N16 290 32.0 / 33.0 18.00%

Q16 290 34.0 / 36.0 18.00%

U16 290 36.0 / 38.0 18.00%

V16 290 37.0 / 39.0 17.50%

Z16 290 39.5 / 41.5 17.00%

Bean oil:

Z15 27.5 40 / 60 20.00%

F16 27.5 130 / 140 20.50%

H16 28.0 225 / 245 20.50%

K16 28.0 285 / 305 20.25%

N16 29.0 340 / 370 20.25%

Q16 29.0 360 / 400 20.00%

U16 29.0 380 / 420 20.00%

V16 29.0 400 / 440 19.75%

Z16 29.0 430 / 470 19.50%

Crush quotes:

                Open                     Closes

JanDec  75.0-75.5             73.0-74.0

Jan         78.0-79.0              76.0-77.0

Mch       80.0-80.5              77.0-78.5

May       80.0-80.5              78.0-79.0

July        80.0-80.5              78.0-79.0

Aug        80.0-82.0              78.5-79.0

Sep        82.0-86.0              81.0-83.0

Oct         77.0-81.0              76.0-78.0

Dec6      81.5-84.0              80.5-81.5

Novsep78.0-80.5              76.0-79.0

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