From The Floor- An Afternoon Recap 2/18/15

News:

 

Egypt GASC is in for wheat for March shipment .

Egypt GASC canceled tender to import US wheat for April shipment, due to high prices.

Egypt FIHC bought 60,000 tons of bean oil for May –July shipment.

Jordan bought 100,000 tons of feed barley , optional origin, for August shipment.

Russia’s Ag Min may review its wheat export tax once it gets export data for February-Reuters.

Russia’s Ag Min said Russia’s current barley and corn exports do not cause concern among officials . –Reuters.

Ukrainian bread makers said they would ask the government to restrict wheat flour exports to protect local bread prices.

A protest has started today on BR-163, starting in the region of Lucas do Rio Verde (north of Cuiaba). The protest is a result of a tax on biodiesel, asking the government to reduce the tax from 17% to 12%. The protest is supported by the association of transport companies in Mato Grosso (ATC) . The protest ended this afternoon .

Ag Canada 2015 Canadian crop estimates

  • All wheat production estimated at 30.0 MMT vs. 2014 production of 29.3 MMT
  • All wheat planted area estimated at 9.9 MH vs. 2014 area of 9.5 MH
  • All wheat exports estimated at 22.5 vs. 2014 exports of 22.5 MMT
  • All wheat domestic use estimated at 9.0 MMT unchanged from 2014.
  • All wheat ending stocks estimated at 4.6 MMT vs. 2014 ending stocks of 4.8 MMT
  • Corn crop estimated at 12.2 MMT
  • Corn planting area estimated 1.3 MH
  • Corn exports estimated at 700,000 tons
  • Corn domestic use estimated at 13.1 MMT
  • Corn ending stocks estimated at 800,000 tons
  • Canola production estimated at 16.0 MMT
  • Canola planting area estimated at 8.3 MH
  • Canola exports estimated at 8.4 MMT
  • Bean production estimated at 6.7 MMT
  • Bean planting area estimated at 2.3 MH
  • Bean exports estimated at 4.8 MMT
  • Bean domestic use estimated at 2.1 MMT
  • Bean ending stocks estimated at 300,000 tons

 

Feds released the minutes from January’s FOMC policy meeting today at 1 pm CST. Headlines from Bloomberg

  • Many on FOMC inclined to keep rates near zero for longer
  • Many saw dropping “patient” from statement as risking a shift in mkt expectations for tightening policy toward “unduly narrow range of dates”; some expressed concern financial mkts might “overreact”
  • Many said premature rate increase might damp recovery in economy/labor mkt; several said “late departure” may result in excessively accommodative policy
  • Number said they’d need further improvement in labor mkt, data pointing to continued economic growth before they would support policy normalization
    • Many said such economic conditions would bolster their confidence that inflation would move toward 2%
  • In discussion of foreign economic outlook, participants saw number of reasons, such as easing by other central banks, that risks to U.S. growth have been reduced
    • Many FOMC participants continued to see deteriorating overseas economies as possibly posing downside risks to U.S. outlook
    • Several said risks had diminished between FOMC mtgs, others noted “heightened” risks
    • Slowdown in China, global disinflationary pressure, tensions in Middle East/Ukraine, financial uncertainty in Greece were discussed
  • Risks to outlook for U.S. economy/labor mkt seen “as nearly balanced”
  • Participants saw economy expanding at solid pace since prior mtg, growing faster than potential GDP in Jan.; saw inflation gradually rising to 2% as labor mkt improves
    • “Tepid” wage growth could be “significant” restraining factor for household spending
  • Increase in exchange value of USD expected to be “persistent” source of restraint on U.S. exports; few participants on FOMC see risk of USD appreciating further
  • FOMC participants also discussed “substantial” decline in nominal long-term rates, despite strength of U.S. outlook and mkt expectations for tightening this yr
  • Jan. survey of primary dealers showed that dealers continue to see highest chance of Fed starting to tighten around mid-2015, while average probability of liftoff after June have “increased somewhat”
  • Fed staff’s outlook for economy over 1H was revised up since Dec., partly due to boost in consumer spending from lower energy prices
  • U.S. stock mkts described as “volatile” between mtgs, based on Fed’s staff review of financial situation
  • Staff saw “valuation pressures” in some asset classes, such as corporate debt mkts, CRE sector; growing role of bond/loan mutual funds may have increased risk that liquidity pressures could emerge in related mkts
  • FOMC may discuss possible enhancements to its statement on longer-run goals, monetary policy strategy in coming yr

March beans closed well below the 50 day moving average of 1012 ¾ . March beans settled at 995 ¾

March beans closed below the 100 day moving average of 1006 ½ . March beans settled at 995 ¾ .

May beans closed below the 100 day moving average of 1012 ½ . May beans settled at 999 ¼

March corn closed above the 20 day moving average of 383. March corn settled at 383

May corn closed above the 20 day moving average of 391 ¼ . May corn settled at 392.

March KC wheat closed below the 20 day moving average of 555 ½ . March KC wheat settled at 548

May KC wheat closed below the 20 day moving average of 558 ½. May KC wheat settled at 549 ½

March Minneapolis wheat closed below the 100 day moving average of 591. March Minneapolis wheat settled at 582.

March bean oil closed below the 50 day moving average of 3209. March bean oil settled at 3201

May bean oil closed below the 50 day moving average of 3229. May bean oil settled at 3220.

March meal closed below t6he 50 day moving average of 343.10. March meal settled at 338.60

March meal closed above the 100 day moving average of 337.60. March meal settled at 338.60.

May meal closed below the 50 day moving average of 336.50. May meal settled at 331.80.

May meal closed below the 100 day moving average of 332.40. May meal settled at 331.80.

Estimated fund activity:

  • Wheat sold 4,000
  • Corn sold 7,000
  • Beans sold 5,000
  • Meal sold 2,000
  • Bean oil sold 2,000

Open outcry option activity:

  • JP Morgan bought 1,500 May bean 1020 calls and bought 1,500 May bean 900 puts at 29 ¼ -32 and sold 525 May futures at  1002-1010
  • JP Morgan bought 1,000 April bean 1040 calls and sold 2,000 July bean 840 puts at ¼-1 ½ credit
  • Rand bought 500 May bean 1040-1000 put spreads at 25 ¼
  • Rosenthal , EDF Mann, and RJO all bought 500 May bean 1100 calls at 5 ¼ -5 3/8, all at the same time.
  • Rosenthal bought 500 May bean 980 puts and sold 1,000 May bean 930 puts at 5 debit.
  • Drax bought 500 April bean 960 puts and sold 500 April bean 1050 calls at 1 ¾ credit and bought 210 May bean futures at 1010
  • ICAP bought 1,000 July corn 420 calls at 16 ¾ and sold 400 July corn futures at 400.
  • ICAP bought 1,000 May corn 410 calls at 8 ¾ and sold 240 May futures at 392 ½ .
  • ABN bought 1,200 Sept corn 560 calls and sold 1,500 Sept corn 600 calls at 1 ½ debit
  • ADM bought 1,000 Sept corn 450 calls and sold 1,000 Sept corn 370 puts at 2 ½-3 debit
  • ADM sold 1,000 May corn 405 call/385 put strangles at 21 ¾
  • Dowd Wescott bought 1,000 Sept corn 420 straddles at 68-68 3/8
  • ICAP bought 400 May corn 400 straddles at 31 ½
  • Macquarie sold 400 May corn 400 straddles at 31 ½ -31 5/8
  • Rand bought 500 July wheat 500 puts at 18 ¾ -19
  • ADM bought 1,500 May wheat 450 puts at 2- 2 ¼
  • ABN bought 900 July wheat 500 puts at 16 5/8 -16 ¾
  • ABN bought 700 May wheat 510-470 put spreads at 10 3/8 -10 ½ .
  • ADM bought 500 May/July wheat CSO even calls at 2 ½
  • JP Morgan bought 500 July meal 300 puts at 6.80
  • JP Morgan bought 300 May meal 350 calls at 7.00
  • FC Stone bought 600 May bean oil 29 puts at 18
  • Tenco bought 1,100 May bean oil 29 puts at 19
  • JP Morgan bought 500 May bean oil 30 puts at 32

Upcoming reports/events

  • China markets are closed through Tuesday Feb 24th for Lunar New Year holiday. Markets resume trading on Wednesday Feb 25th
  • Weekly API energy inventory report comes out today at 330 pm CST.
  • Annual USDA Outlook Conference begins tomorrow and ends Friday.
    • ‘15/16 US balance sheets expected to come out Friday morning.
    • Weekly US jobless claims report comes out tomorrow at 730 am CST
    • Weekly EIA Nat Gas storage report comes out tomorrow at 930 am CST , expecting -111 BCF.
    • Weekly DOE energy inventory report comes out tomorrow at 10 am CST, expecting
      • Crude a build of 3.0 MB
      • Gas a draw of 500,000 barrels
      • Distillates a draw of 2.0 MB
      • Weekly US ethanol plant production report comes out tomorrow at 10 am CST.
      • Weekly US export sales report comes out on Friday at 730 am CST, delayed due to US holiday on Monday.

Closing vols and ATM straddles

Corn:

H vol 20 ½ 385 str 5 ½ -6

J vol 19 390 str 18 ¾ -19 ¾

K vol 23 390 str 30-30 ¾

N vol 25 ¾ 400 str 48 ¼ -49

U vol 28 ½ 410 str 65 ¾-66 ½

Z vol 25 ¾ 410 str 72 ½ -73 ½

Beans:

H vol 21 ½ 990 str 15-16

J vol 17 1000 str 43-44 ½

K vol 19 1000 str 63 ½-64 ½

N vol 19 ¾ 1000 str 93-94 ½

X vol 19 ¼ 980 str 122-123 ½

Wheat:

H vol 25 ¼ 530 str 8-12

J vol 25 520 str 32-35

K vol 25 ¾ 520 str 44-46

N vol 26 530 str 63-65

U vol 26 ½ 530 str 78-81

Z vol 24 ¾ 550 str 91-95

KC wheat:

H vol 23 ½ 550 str 8-11

J vol 23 ½ 550 str 32-34

K vol 23 ¾ 550 str 43-45

N vol 24 ¼ 560 str 63-65

U vol 24 ½ 570 str 78-81

Z vol 23 580 str 90-94

Minneapolis wheat:

H vol 20 580 str 8-14

K vol 22 580 str 40-47

N vol 23 580 str 60-68

U vol 23 590 str 72-80

Z vol 23 600 str 90-105

Meal:

J vol 24.5 330 str 20-22

K vol 24.5 330 str 27-28

N vol 23.5 330 str 36-38

Q vol 22.5 330 str 38-40

U vol 22 330 str 41-43

V vol 21 320 str 42-44

Z vol 20 320 str 45-48

Bean oil:

J vol 20.5 32 str 160-175

K vol 20.25 32 str 210-230

N vol 20 32.5 str 300-320

Q vol 19.75 32.5 str 325-350

U vol 19.75 32.5 str 350-375

V vol 19.75 32 str 380-405

Z vol 20 32 str 420-445

Crush quotes:

OPEN                    CLOSE

MCH         1.005-1.01           1.015-1.02

MAY         83-83.5                 84.5-85

JLY            73-74                     74.5-75.5

AUG         70.5-71                 73-74

SEP           83-85                     84-85

OCT          82.25-84.5            83-84

DEC          81-82                      81.5-82

JAN          79.5-80.5              79.5-80.5

MCH6      78.5-80                 78.5-80

MAY6       75-79                    75-79

Crush and oil share players:

  • ABN sold 40 July crush at 74.25
  • Cunningham bought 60 March crush at 1.01-1.02
  • Jefferies sold 100 May crush at 84
  • RJO bought 40 August crush at 72
  • RJO bought 40 Sept crush at 84.5
  • No oil share pit players today.

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