Grains-Afternoon Recap of Market

News:

South Korea NOFI canceled tenders for 69,000 optional origin corn and for 65,000 optional origin wheat

Buenos Aires Grains Exchange estimated ‘15/16 corn area at 2.72 MH down 20% from a year ago

Argentina wheat crop will likely decline due to flooding. Farmers are expecting a 6% loss in recently planted wheat

Argentina Ag min – farmer selling as of Aug 12th
· 91.95% of their ‘14/15 wheat crop sold vs. 66.62% a year ago
· 67.47% of their ‘14/15 corn crop sold vs. 62.61% a year ago
· 62.36% of their ‘14/15 bean crop sold vs. 53.82% a year ago

Russia’s deputy prime minister estimated Russia’s 2015 grain crop at 100+ MMT

Russia’s Aug 1st grain stocks at 28.9 MMT down 6.1% from a year ago

Ukraine analysts estimated Ukraine’s 2015 grain crop at 59.1 MMT vs. 63.9 MMT in 2014

Reports of strong US corn cash markets

November beans made a new contract low today of 890 ¾

Jan – Sept 2016 beans also posted contract lows

Widespread rains in the Midwest this week helping the conditions of the soybean crops

Today was the third day of the ProFarmer US Midwest crop tour. Final results from the tour will come out Friday afternoon.
Third day of tour estimates/results –Final results from Illinois will come out tonight
· Southwestern Iowa estimated average corn yield at 149.0 BPA ,vs. 180.9 BPA a year ago and vs. 3 year average of 159.34 BPA
· Another group in the same area estimated average corn yield at 201.0 BPA
· Southwestern Iowa estimated average soybean pod count at 965 pods vs. 1,166 pods a year ago and vs. 1,103.9 pods 3 year average
· Another group in the same area estimated average soybean pod count at 1,384 pods
· Central Illinois estimated average corn yield at 171 BPA vs. 197.8 BPA a year ago and vs. 167.4 BPA three year average
· Central Illinois estimated average soybean pod count at 1,247.8 pods vs. 1,370.1 pods a year ago and vs. 1,135.7 pods three year average

FOMC minutes from the July 28-29 meeting came out today at 1 pm CST. Headlines from Reuters
· PARTICIPANTS GENERALLY FAVOR KEEPING FEDERAL RESERVE BALANCE SHEET TOPPED UP IN EARLY STAGES OF NORMALIZATION – MINUTES FROM FED’S JULY POLICY-SETTING MEETING
· MOST PARTICIPANTS WANT PREDICTABLE WIND-DOWN OF REINVESTMENTS WHEN TIME COMES – MINUTES
· SOME PARTICIPANTS FAVOR ENDING REINVESTMENTS ALL AT ONCE WHEN TIME IS APPROPRIATE – MINUTES
· MOST PARTICIPANTS WANT TO END BALANCE SHEET REINVESTMENTS BASED ON ECONOMIC CONDITIONS, OUTLOOK – MINUTES
· NO DECISION YET ON PHASING OUT REINVESTMENTS – MINUTES
SOME FED OFFICIALS SAID GRADUAL RISE IN RATES LIKELY APPROPRIATE AFTER LIFT-OFF – MINUTES
· FED MAY PHASE OUT REINVESTMENTS OF MORTGAGE-BACKED SECURITIES, TREASURIES USING DIFFERENT STRATEGIES – MINUTES
· MOST FED OFFICIALS SAID RATE HIKE STILL NOT WARRANTED BUT CONDITIONS “WERE APPROACHING THAT POINT” – MINUTES
FED OFFICIALS DISCUSSED CHINA STOCK MARKET DECLINE, GREEK DEBT DEAL AND PUERTO RICO – MINUTES
FED OFFICIALS AGREED TO ALTER STATEMENT ON WHEN READY TO HIKE INTEREST RATES BY SAYING ‘SOME’ FURTHER IMPROVEMENT IN LABOR MARKET, INFLATION OUTLOOK – FED MINUTES
ONE FED OFFICIAL WAS READY TO HIKE BUT WILLING TO WAIT FOR ADDITIONAL DATA – MINUTES
Estimated fund activity
· Wheat bought 1,000
· Corn bought 4,000
· Beans sold 9,000
· Meal sold 2,000
· Bean oil sold 5,000

Upcoming reports/events:
· ProFarmer Midwest crop tour continues . Final estimates from tour come out on Friday after the close
o Final estimates from Illinois will come out tonight
o Final estimates from Iowa and Minnesota will comes out on tomorrow night
o Final estimates from total tour will come out Friday after the close
· Surveyors SGS and Intertek will estimate Malaysia’s Aug 1-20 palm oil exports tomorrow
· 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 300 -500,000 tons
o Corn 350 -800,000 tons
o Beans 500,000 -1.050 million tons
o Meal 25 -225,000 tons
o Bean oil 0-15,000 tons
· Weekly EIA Nat Gas storage report comes out tomorrow at 930 am CST expecting +60 BCF

Option players:
· EDF sold 1,500 Sept short dated 910-900 put spreads at 4 ¾ -5 and sold 330 Nov futures at 905 ½
· EDF sold 1,000 Sept short dated 900-890 put spreads at 5 3/8 -5 ½ and sold 220 Nov futures at 892-893 ½
· ABN bought 1,000 Nov bean 880-820 put spreads at 14 7/8 and bought 220 Nov futures at 905
· ABN sold 1,000 Nov bean 820 puts at 7 ¼ -7 ½
· ABN sold 1,000 Nov bean 800 puts at 4 ¾
· ABN sold 1,000 Sept 920-900 put spreads at 11
· ABN bought 12,000 Dec corn 370 puts 16-17 tied to futures at 379
· FI bought 2,500 Dec corn 360 puts at 12 5/8 tied to futures at 379
· ICAP bought 4,000 Nov corn 400 calls at 10 5/8 tied to futures at 378 ½
· JP Morgan sold 1,000 Dec corn 350p-400c strangles at 22 ¾
· Advantage bought 1,000 Dec corn 380 puts at 22 ¾ tied to 378
· EDF sold 1,000 Dec 320p / 440 c strangles at 8 tied to futures at 378
· LFG bought 2,500 Dec 380 puts at 22 ¼ -22 ½ tied to 378
· FI sold 500 Nov wheat 470 puts at 9 3/8
· Macquarie bought 500 Oct wheat 490 puts and sold 750 Oct wheat 460 puts at 15 ¾ tied to futures at 496
· Macquarie bought 1,000 Dec wheat 490 calls vs. 495 and sold 1,000 KC Dec wheat 490 calls vs. 489 at 3 ½ debit
· Rosenthal bought 500 July bean oil 31-37 call spreads at 105
· ADM sold 500 Dec bean oil 28 puts at 107
· FI sold 1,000 Oct bean oil 30 calls at 24-25

Closing vols and ATM straddles: -September options expire on Friday on the close

Corn:
U15 370 7.75 / 8.75 28.00%
V15 380 26 / 27 26.75%
X15 380 34.75 / 35.75 27.25%
Z15 380 40.75 / 41.75 26.75%
H16 390 56.5 / 58 26.00%
K16 400 66 / 68 25.50%
N16 400 74 / 76 25.50%

Beans:
U15 900 15.5 / 16.5 27.00%
V15 900 50 / 51 22.00%
X15 900 64 / 65 21.25%
F16 900 83.5 / 85 19.75%
H16 900 97.5 / 99.5 19.25%
K16 900 106 / 109 18.00%

Wheat:
U15 490 8 / 9.5 23.75%
V15 500 34 / 36 27.25%
Z15 500 52 / 55 26.50%
H16 500 70 / 73 25.50%
K16 500 81 / 83 25.25%

KC wheat:
U15 470 7 / 9 24.50%
V15 490 33 / 35 27.00%
Z15 490 50 / 52 26.00%
H16 500 70 / 73 25.25%
K16 510 83 / 87 25.00%

Minneapolis wheat:
U15 505 7 / 10 25.00%
Z15 520 46 / 50 23.50%
H16 540 64 / 69 22.75%

Meal:
U15 325 5.50 / 6.50 31.50%
V15 320 22 / 23 26.75%
Z15 310 31.50 / 32.50 25.00%
F16 310 34 / 35 23.00%
H16 310 37 / 39 22.5%

Bean oil:
U15 28 45 / 60 28.00%
V15 28 160 / 175 23.00%
Z15 28.00 235 / 255 21.25%
F16 28.5 265 / 285 20.5%
H16 28.5 310 / 335 20.00%

Crush quotes:
OPEN CLOSES
Sep 113.0-115.0 116.5-118.0
Oct 104.0-105.0 106.5-107.0
Dec 100.0-100.5 102.0-102.5
Jan 91.0-92.5 93.5-94.5
Mch 875-89.0 90.0-91.0
May 82.0-84.0 84.0-85.5
Jly 81.5-83.5 83.0-84.0
Aug 82.0-85.0 82.5-84.0
Dec6 94.0-98.5 96.0-98.0
Novsep122.0-123.0 127.0-128.5
Jandec 94.0-94.5 96.5-97.0