From The Floor-An Afternoon Recap 11/18/15

News:

January soymeal made new contract lows today of 284.00 , old low was 285.60

Talk/Reports of China buying US sorghum and DDGs cargoes

Reports China buying several cargoes of US soybeans for Dec-Jan shipment over the past two days

Market awaits Argentina presidential elections on Sunday. Expectations new president will lower grain and soybean export taxes. New administration will take office on December 10th .

Green Pool Commodity Specialists said giant Chinese corn stocks seen cutting China’s ethanol imports by two-thirds in 2016.

  • Chinese 2016 corn stocks expected to reach highest level in 15 years
  • Green Pool estimated China’s 2016 ethanol imports at 150 million liters vs. 2015 ethanol import estimate of 441 million liters

Tunisia seeks 134,000 tons of optional origin soft wheat for Dec-Feb shipment

Tunisia seeks 92,000 tons of optional origin durum wheat for Feb-April shipment

Tunisia seeks 25,000 tons of optional origin feed barley for January shipment

Ethiopia is expected to tender to buy more wheat , due to drought

  • Late last month Ethiopia bought 1.0 million tons of optional origin wheat
  • United Nation said 15 million people may need food aid by early 2016

Jordan canceled tender to buy 100,000 tons of optional origin wheat for Feb-March shipment

Delays in rapeseed planting in India

There has been talk/reports this week saying there is concerns about bean crop in Mato Grosso due to dryness.

  • Brazilian contacts are saying there is no cause for concern at this time 
  • US weather forecaster said there is some dryness in far northeast and western parts of Mato Grosso which are not important grain production areas

Favorable crop weather in Argentina over the next two weeks

Favorable crop weather in Australia over the next 10 days

FOMC released the minutes today at 1pm CST from the October 27-28 US Fed meeting. Headlines / highlights

  • Most policymakers at October FOMC meeting anticipated US economic conditions and outlook could well warrant rate hike at December meeting

o   Next FOMC 2 day policy meeting is December 15-16th

  • Some policymakers said would be prudent to have additional policy tools in case fed policy rate stuck persistently closer to zero
  • Most policymakers saw downside risks from global economic and financial developments as having diminished
  • Fed policymakers said substantial global oil supply likely to contribute to increase in restructurings , bankruptcies in energy sector
  • Fed policymakers noted US financial system appeared to weather global financial turbulence without any sign of systemic stress
  • Fed policymakers saw reference to Dec meeting in October statement as “leaving policy options open” for next meeting , few worried this could signal too strongly the expectation of a Dec hike.

Weekly DOE energy inventory report came out today at 930 am CST

  • Crude at a build of 252,000 barrels , expecting a build of 2.0 million barrels
  • Gas at a build of 1.01 million barrels , expecting a draw of 1.5 million barrels
  • Distillates at a draw of 791,000 barrels, expecting a draw of 500,000 barrels

Weekly US ethanol plant production report came out today at 930 am CST

  • Weekly US ethanol output down .7% BPD to 975,000 BPD
  • Weekly US ethanol stocks up 2.1%  BBLS to 19.2 MB

Estimated fund activity:

  • Wheat sold 3,000
  • Corn even
  • Beans sold 5,000
  • Meal sold 4,000
  • Bean oil sold 2,000

Upcoming reports/events:

  • Weekly US jobless claims report comes out tomorrow at 730 am CST
  • Weekly US export sales report comes out tomorrow at 730 am CST. Expecting

o   Wheat 200-400,000 tons

o   Corn 500-700,000 tons

o   Beans 700,000 -1.1 million tons

o   Soy meal 150-300,000 tons

o   Bean oil 10-40,000 tons

  • Weekly EIA Nat Gas storage report comes out on Thursday at 930 am CST , expecting +22 BCF
  • OPEC meeting on December 4th in Vienna.

Option players:

  • RJO bought 3,000 Jan bean 850 puts at 12 ½-12 ¾  tied to Jan futures at 862
  • TJM bought 2,000 March bean 780-760 put spreads at 2 3/8
  • TJM bought 1,200 March bean 820 puts at 15-15 ½ 
  • TJM sold 1,000 March bean 840 puts at 21
  • Drax sold 500 March bean 800 p / 940 c strangles at 16 ½
  • ABN bought 600 Jan bean 840-800 put spreads at 9
  • JP Morgan bought 1,800 March corn 410 calls at 3 5/8
  • Drax bought 500 July corn 370 puts and sold 500 March corn 380 puts at 2 credit
  • Drax sold 2,000 Feb wheat 470 puts at 10 ¾ tied to March futures at 485 ¼
  • Rosenthal bought 500 July wheat 500-550 call spreads and sold 500 July wheat 450 puts at even to 2.
  • JP Morgan sold 500 Dec wheat 500-490 call spreads at 2 tied to Dec futures at 487
  • EDF Mann sold 500 Feb wheat 480-490 put spreads at 5 ¼ tied to March wheat futures at 486 ½ 
  • EDF Mann sold 1,000 Dec wheat 480-490 put spreads at 5 ¾
  • FI sold 500 March wheat 450-470 put spreads at 7 ¼ tied to March futures at 485
  • Rand sold 500 March meal 300-280 put spreads at 11.60
  • FI bought 1,800 Dec meal 285 puts at 3.00
  • FI bought 1,000 Dec meal 290 calls at .90-1.00
  • FI sold 500 Jan bean oil 28 calls at 44
  • FI sold 1,000 July bean oil 29-33 call spreads and bought 1,000 July bean oil 25 puts at 38-40 credit

Closing vols and ATM straddles: – December options expire on Friday

Corn:

Z15 360 4 / 5 17.50%

F16 370 16.75 / 17.75 18.00%

G16 370 24.75 / 25.75 20.00%

H16 370 29.50 / 30.50 20.00%

K16 370 38.75 / 39.75 20.50%

N16 380 49.75 / 50.75 21.50%

U16 380 60 / 61.50 22.75%

Z16  390 67 / 68 21.50%

Z17 400 83 / 87 19.25%

Beans:

Z15 860 10 / 12

F16 860 34 / 36 16.50%

H16 860 59 / 61 17.25%

K16 860 75 / 77 16.75%

N16 880 90 / 92 17.00%

U16 880 104 / 108 16.75%

X16 880 112 / 117 16.75%

Wheat:

Z15 480 6.50 / 7.50 20.00%

F16 480 24.50 / 27.00 20.75%

H16 480 44 / 47 23.00%

K16 490 60 / 62 24.00%

N16 490 73 / 75 24.50%

KC Wheat:

Z15 460 6 / 8 19.25%

F16 470 22.50 / 24.50 20.00%

H16 470 41 / 43 22.50%

K16 480 56 / 59 23.50%

N16 490 70 / 74 24.75%

Minneapolis wheat:

Z15 500 5 / 8 18.00%

H16 500 38 / 40 20.00%

K16 510 57 / 61 22.00%

N16 520 69 / 74 23.00%

Meal:

Z15 285 5.0 / 6.0

F16 290 13.0 / 14.0 18.00%

H16 290 21.5 / 22.5 18.75%

K16 290 27.5 / 28.5 18.50%

N16 290 32.5 / 33.5 18.50%

Q16 290 34.0 / 36.0 18.50%

U16 290 36.5 / 38.5 18.25%

V16 290 37.0 / 39.0 18.00%

Z16 290 40.0 / 42.0 17.50%

Bean oil:

Z15 27.5 30 / 50

F16 28.0 130 / 150 20.00%

H16 28.0 215 / 235 20.00%

K16 28.0 280 / 300 20.00%

N16 29.0 340 / 370 20.00%

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  73.5-74.5             71.5-72.5

Jan         77.0-78.0              75.0-75.0

Mch       79.0-80.0              75.5-76.0

May       79.0-80.0              76.5-77.5

Jly           79.0-80.0              77.0-77.5

Aug        79.0-80.0              77.5-79.0

Sep        80.0-83.0              79.5-83.0

Oct         76.5-79.0              75.5-78.0

Dec6      80.5-82.5              79.5-81.0

NovSep 77.5-80.0              76.0-79.0

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