News From The Grain Floor 01/07/15

Good morning.

 

“Americans used to roar like lions for liberty; now we bleat like sheep for security.”

–          Norman Vincent Peale

 

No USDA announcements this morning.

 

Overnight closes

  • SH up 2 ¼ at 1058
  • CH down 1 ¼ at 403 ¾
  • WH down a ½ at 591 ¼
  • KC WH down a ½ at 630 ¾
  • MWH down 1 ½ at 624
  • SMH up .60 at 355.70
  • BOH up 26 at 3313
  • RRH down 2 at 1159

 

Overnight volume

  • SH 15,807
  • CH 11,782
  • WH 3,564
  • KC WH 548
  • MWH 127
  • SMH 5,685
  • BOH 9,677
  • RRH 25

 

Opening calls

  • Beans steady to 3 higher
  • Corn 1-3 lower
  • Wheat steady mixed
  • KC wheat steady mixed
  • Minneapolis wheat 1-3 lower
  • Meal steady to 1.00 higher
  • Bean oil 20-30 higher
  • Rice 1-3 lower

 

Gold and silver lower . Crude, stock market and dollar higher.

 

Nikkei up .01%

Hang Seng up .8%

Shanghai Index up .7%

 

US November trade balance report came out this morning at 730 am CST. Headlines from Reuters.

  • Trade deficit falls to $39.0 billion in November – 11 month low
  • Imports fall 2.2 percent; lower oil prices a big driver
  • Private payrolls rise 241,000 in December
  • US NOV TRADE DEFICIT $39.00 BLN, LOWEST SINCE DEC 2013 (CONSENSUS $42.0 BLN) VS OCT DEFICIT $42.25 BLN (PREV $43.43 BLN)
  • US NOV EXPORTS -1.0 PCT VS OCT +1.6 PCT, IMPORTS -2.2 PCT VS OCT +0.7 PCT
  • US NOV GOODS DEFICIT $58.28 BLN, SERVICES SURPLUS $19.28 BLN
  • US NOV EXPORTS $196.36 BLN VS OCT $198.32 BLN, IMPORTS $235.36 BLN VS OCT $240.57 BLN
  • U.S. NOV CAPITAL GOODS IMPORTS $50.10 BLN VS OCT IMPORTS $50.90 BLN
  • U.S.-CHINA NOV TRADE DEFICIT $29.94 BLN VS OCT DEFICIT $32.55 BLN
  • US-OPEC NOV TRADE DEFICIT $0.78 BLN VS OCT DEFICIT $1.76 BLN; IMPORTS FROM OPEC $7.69 BLN, LOWEST SINCE APRIL 2009
  • US NOV OIL IMPORT PRICE $82.95/BBL, LOWEST SINCE DEC 2010, VS OCT $88.47/BBL, -12.4 PCT FROM NOV’13 $94.69/BBL
  • US NOV PETROLEUM IMPORTS $23.1 BLN, LOWEST SINCE AUG 2009

 

The minutes from the FOMC December meeting comes out today about 1 pm CST

 

Weekly API energy inventory report came out yesterday afternoon at 330 pm CST

  • Crude a draw of 4.0 MB expecting a build of 880,000 barrels
  • Gas a build of 6.9 MB expecting a build of 3.4 MB
  • Distillates a build of 9.1 MB expecting a build of 1.9 MB

 

China grain closings = beans down 11, corn up 3, meal up 15, palm oil up 10, and bean oil up 16.

 

Malaysian palm oil up 47. Highest levels in two months due to flood concerns

 

Hearing China bought 2+ cargoes of new crop US soft red winter wheat this week.

 

Hearing China bought some US bean cargoes for February shipment this week.

 

Hearing China has already bought 3.0 MMT of beans for February.

 

Hearing China’s soybean needs are 60% covered for February.

 

Kuwaiti bought 80,000 tons of feed barley, optional origin for April-May shipment

 

South Korea KOCOPIA bought 55,000 tons of US corn for April shipment

 

South Korea MFG seeks 70,000 tons of optional origin corn for April-May shipment

 

Japan seeks 122,770 tons of food wheat for March shipment. Breakdown

  • 60,370 tons of US western white wheat
  • 62,400 tons of US dark northern spring wheat

 

Japan seeks 16,150 tons of feed barley via SBS tender for March shipment

 

UAE seeks 40,000 milling wheat, 20,000 feed barley, and 14,000 soymeal for Feb-April shipment .

 

FC Stone estimated Brazil’s ‘14/15 bean crop at 93.5 MMT vs. previous estimate of 93.1 MMT

 

FC Stone estimated Brazil’s ‘14/15 total corn crop at 73.8 MMT vs. previous estimate of 74.3 MMT

 

China grain auctions from state reserves continue, ends tomorrow. China will auction 2.0 MMT of wheat , 5.0 MMT of corn and 8.0 MMT of rice from state reserves .

 

Bitter cold across the US.

 

Some dryness concerns in South America

 

Informa updated their world crop estimates yesterday as well.

Here are some key highlights:

  • 2014 world corn production up 8.3 million tons from prior estimate to 990.05 million tons (Brazil up 3.5 million, China up 1.7 million, Ukraine up 1.5 million)
  • 2015 world corn production down 2.3 million tons from prior estimate to 965.6 million tons (Ukraine down 3 million, US down 1.4 million, Brazil up 2 million)
  • 2014 world wheat production up 1 million tons from prior estimate to 721.6 million tons
  • 2015 world wheat production up 7.3 million tons from previous estimate to 718.2 million tons (EU up 7 million)
  • 2014 world soybean production up 575,000 tons from prior estimate to 312.96 million tons
  • 2015 world soybean production up 500,000 tons from prior estimate to 313.7 million tons
  • 2014 world rapeseed production up 755,000 tons from prior estimate to 71.89 million tons
  • 2015 world rapeseed production down 2 million tons from prior estimate to 68.9 million tons (EU down 1.5 million, India down 400,000)

 

49 new ethanol receipts were registered yesterday afternoon.

  • 32 out of Vitol Inc., Argo IL
  • 4 out of Louis Dreyfus, Argo IL
  • 5 out of ADM, Argo IL
  • 8 out of Aventine Renewable Energy LLC.,  Pekin IL

 

126 new rice receipts were registered yesterday afternoon.

 

Receipt Registrations as of yesterday afternoon

  • Wheat = 165
  • Oats = 98
  • Corn = 1,017
  • Ethanol = 49
  • DDG = 0
  • Soybeans = 21
  • Bean oil = 3,405
  • Meal = 0
  • Rice = 970
  • KC wheat = 318

 

Deliveries:

  • Rice = 126 with the date at 12/30/14
  • Bean oil = 200 with the date at 12/31/14
    • House ADM stopped 170
  • Ethanol = 49 with the date at 12/22/14
  • No beans
  • No meal

 

Moving averages:

  • March bean 20 day 10 42 ½
  • March corn 20 day 405 ¾
  • March corn 50 day 394
  • March corn 200 day 417
  • March KC wheat 50 day 622 ¼
  • March Minneapolis wheat 20 day 630 ½
  • March bean oil 20 day 3240
  • March bean oil 50 day 3279
  • March bean oil 100 day 3297
  • March meal 20 day 354.40
  • March meal 50 day 351.80
  • March meal 200 day 357.00

 

Estimated fund activity from yesterday:

  • Wheat bought 2,000
  • Corn sold 3,000
  • Beans bought 4,000
  • Meal bought 1,000
  • Bean oil sold 1,000

 

Open outcry option players from yesterday:

Corn:

RJO bot 2000 G 380 puts

FCS bot 500 H 410 straddles/sold 1000 H 460 calls-360 put strangles

ADM sold 1000 G 415 calls/395 put strangles

 

Beans:

Rand bot 2000 H 980 puts/bot 400 SH

Bache sold 500 N 1100 calls/bot 230 SN

FI bot 500 G 1020 puts/sold 500 H 950 puts/bot 90 SH

Rosenthal bot 400 G 1020-1000 put spreads

TJM bot 400 H 1030 straddles/sold 400 H 1050 straddles

 

Meal:

Drax sold 250 N 360-400 call spreads covered

 

Oil:

RJO sold 1500 H 32 ½ calls/bot 1500 N 34-37 call spreads

RJO bot 500 G 32 puts

Bunge sold 200 G 33 ½ calls/31 ½ put strangles

 

 

Open interest as of yesterday’s close

  • Total corn 1,258,071 open, up 5,194
  • Jan beans 7,538 open, down 1,433
  • Total beans 609,646 open, up 758
  • Jan meal 3,942 open, down 1,208
  • Total soymeal 336,593 open, down 2,480
  • Jan bean oil 1,888 open, down 7
  • Total bean oil 359,305 open, down 1,802
  • Total wheat 376,210 open, up 2,109
  • Total KC wheat 130,914 open, down 662

 

Upcoming reports/events

  • Weekly DOE energy inventory report comes out today at 930 am CST. Expecting
    • Crude a build of 700,000 barrels
    • Gas a build of 4.5 million barrels
    • Distillates a build of 1.75 million barrels
  • Weekly US ethanol plant production report comes out today at 930 am CST
  • Weekly US jobless claims report comes out tomorrow at 730 am CST
  • Weekly US export sales report comes out tomorrow at 730 am CST
  • Weekly EIA Nat Gas storage report comes out tomorrow at 930 am CST expecting down 117 BCF.
  • Yearly fund rebalance starts tomorrow January 8th –and ends on the 14th. Hearing
    • Assumed $60 billion Bloomberg and $70 billion GSCI as of 12/30
      • Live Cattle sell 10,248
      • Lean Hogs sell 889
      • WTI crude oil buy 18,591
      • Brent oil buy 39,217
      • RBOB buy 11,197
      • Nat Gas buy 16,078
      • Heating Oil buy 6,202
      • Wheat sell 10,343
      • Corn sell 18,445
      • Beans buy 3,990
      • Aluminum sell 13,386
      • Gold sell 5,721
      • Copper buy 549
      • Zinc sell 4,463
      • Nickel sell 8,954
      • Silver buy 2,355
      • Sugar sell 7,438
      • Cotton buy 4,044
      • Coffee sell 15,558
      • KC wheat sell 2,741
      • Bean oil sell 1,136
      • Soymeal buy 1,131
      • Feeder cattle buy 1,200
      • Gasoil sell 10,661
      • Lead buy 404
      • Cocoa buy 546
  • CONAB comes out with their ‘14/15 Brazilian crop estimate updates on January 9th. Previous estimates were
    • Bean crop estimated at 95.8 MMT (record)
    • Bean exports estimated at 49.6 MMT
    • Total corn crop estimated at 78.7 MMT
    • Wheat crop estimated at 5.95 MMT
  • December unemployment comes out on Friday Jan 9th at 730 am CST
  • SGS and Intertek Agri Services comes out on January 12th with their Malaysian Jan 1-10th palm oil export estimates
  • Malaysian Palm Oil Board December palm oil data report comes out January 12th
  • Final 2014 US crop production, and grain stocks  USDA report comes out on Monday January 12th at 11 am CST. I will email report estimates this morning.
  • Last trading day for Jan futures is Jan 14th , futures expire at noon CST
  • I will be out of the office starting Friday January 16th and will return on Monday January 26th. If you need assistance you can call the desk at 312-588-5508.
  • ECB meets in Frankfurt for the first time in 2015 on January 22nd
  • February options expire Jan 23rd at 115 pm CST
  • Greece elections January 25th
  • FOMC 2 day policy meeting January 27-28
  • USDA to restart monthly US ethanol reports in February 2015
  • USDA to restart month Census crush reports in July 2015

 

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