News From The Grain Floor 03/31/15

Weather Highlights:

Midwest/Delta: Episodes of wet weather will slow early field work in the east and south areas.

US Plains: Dryness and above normal temperatures remain an issue for wheat areas.

Black Sea Region: Long term continues to suggest wet weather pick up in rains.

Argentina: Dry and warm forecast for the next 7-10 days to favor harvesting.

Overnight closes:

  • SK up 5 3/4 at 979
  • CK up 1/2 at 376 3/4
  • WK down 1 1/2 at 510 1/4
  • KC WK down 2 at 557 1/4
  • MWK down 1 1/4 at 574 3/4
  • SMK up 1.00 at 327.80
  • BOK up 24 at 30.63

Overnight volume:

  • SK 14,972
  • CK 14,405
  • WK 7,065
  • KC WK 1,298
  • MWK 100
  • SMK 4,705
  • BOK 7,771

Overnight Option Volume:

  • Corn 2,981
  • Beans 4,430
  • Meal 111
  • Bean oil 20
  • Wheat 611

Active Strikes in Overnight Trade:

  • CN 390 puts – traded 700
  • CN 390 calls – traded 660
  • CK 400 calls – traded 405
  • SK 950 puts – traded 1076
  • SK 940 puts – traded 1028
  • SK 970 calls – traded 859

Significant OI Changes from previous session

  • CK 380 C increased 1,692 total (9,703)
  • CK 390 C decreased 1,459 total (17,784)
  • CK 370 P decreased 2,850 total (21,457)
  • CK 380 P decreased 2,009 total (18,322)
  • SK 970 C increased 1,816 total (5,694)
  • SK 950 P decreased 2,037 total 23,750
  • SMK 300 P decreased 1,075 total (8,255)
  • WK 480 P decreased 1,001 total (5,152)
  • WK 520 P increased 1,307 total (5,701)

Total EOO’s cleared from previous session

  • CU 410 C 14
  • CN 400 C 9
  • CU 410 P 8
  • CZ 410 P 8
  • CN 400 P 7

USDA Recap

Yesterday’s reports were a disappointment for the corn bulls as the USDA survey was higher than the average guess…not by much but the trade was long corn / short beans coming into this report with the sx/cz ratio trading near 2.25 before the report…the lack of reduction in corn acres provoked heavy liquidation in that ratio spread as it’s back near 2.39 this morning. Compared to the USDA Forum from February, the acreage numbers were very close in corn (89.2 vs 89.0), 1.1 million acres up in beans (84.6 vs 83.5) while all wheat acres were just a touch lower (55.4 vs 55.5). The important thing here is that these acreage numbers can of course change a lot in the coming weeks…some are already suggesting that this is the highest corn acreage number of the season and the lowest bean one…historically, corn acres can more or less vary 2 million acres up or down (on average)…so corn acres can still end up near 87 million acres…same thing for beans, acres on average can vary about 2 million up or down so if things do change in the coming weeks we could still have about 87 million bean acres. The wheat numbers were close to the guesses. Below are potential balance sheets with yesterday’s acreage numbers and a scenario where 2 million acres are switched from corn to beans. If the corn acres do end up near 87, it gives with 166 yield a 1.4 billion bushels carry out (that compares with something closer to 1.7 with 89.2). If beans acres end up near 86.6, it gives an even more bearish S&D in 2015/16 compared to 2014/15 (558 carry out vs 385 current USDA estimate for 14/15).

US Corn S&D:

US CORN S&D

USDA (Mch)

USDA (Forum)

89.2 acres

87 acres

SEP/AUG

2014/15

2015/16

2015/16?

2015/16?

Planted Acres

90.6

89.0

89.2

87.0

Harvested Acres

83.1

81.5

81.6

79.6

% Harvested

91.7

91.6

91.5

91.5

 

Yield

171

166.8

166

166

 

Carry In

1232

1827

1900

1900

Production

14216

13595

13546

13214

Imports

25

25

25

25

Total Supply

15472

15447

15471

15139

 

Feed and Residual

5300

5275

5275

5275

FSI

6595

6635

6635

6635

     Ethanol

5200

5225

5225

5225

Exports

1800

1850

1850

1850

Total Use

13695

13760

13760

13760

 

Carry out

1777

1687

1711

1379

Stock to Use Ratio

12.98

12.26

12.43

10.02

US Beans S&D:

US SOYBEANS S&D

USDA (Mch)

USDA (Forum)

84.6 acres

86.6 acres

SEP/AUG

2014/15

2015/16

2015/16?

2015/16?

Planted Acres

83.7

83.5

84.6

86.6

Harvested Acres

83.1

82.6

83.5

85.4

% Harvested

99.3

98.9

98.7

98.6

 

Yield

47.8

46

46

46

 

Carry In

92

385

385

385

Production

3969

3800

3841

3928

Imports

25

25?

25

25

Total Supply

4086

4210

4251

4338

 

Crush

1795

1840

1840

1840

Exports

1790

1820

1820

1820

Seed

92

90?

90

90

Residual

24

30

30

30

Total Use

3701

3780

3780

3780

 

Carry out

385

430

471

558

Stock to Use Ratio

10.40

11.38

12.46

14.77

US Wheat S&D:

US WHEAT S&D

USDA (Mch)

USDA (Forum)

 

JUNE/MAY

2014/15

2015/16

2015/16?

Planted Acres

56.8

55.5

55.4

Harvested Acres

46.4

47.8

47.8

% Harvested

81.7

86.1

86.3

 

Yield

43.7

45.2

45.2

 

Carry In

590

692

692

Production

2026

2125

2125

Imports

160

150

150

Total Supply

2776

2967

2967

 

Dom. Use

1185

1229

1229

Exports

900

975

975

Total Use

2084

2204

2204

 

Carry out

692

763

763

Stock to Use Ratio

33.21

34.62

34.62

Funds Positions:

COT

COT

COT

Current

17-Mar

24-Mar

to COT

25-Mar

26-Mar

27-Mar

30-Mar

31-Mar

Estimate

Corn

-58325

-35688

22637

3000

-7000

-1000

6000

-20000

-54688

Wheat

-60035

-76,941

-16906

-3000

-9000

5000

10000

-9000

-82,941

Soybeans

-48484

-44024

4460

-2000

-4000

-4000

1000

6000

-47024

Soymeal

5050

2860

-2190

-1000

-2000

-1000

1000

3000

2860

Soyoil

-5259

-2439

2820

-1000

-1000

-2000

-1000

0

-7439


News:

Dollar and stock market lower. Gold, silver, and crude higher

Nikkei down .90%

Hang Seng up .7%

Shanghai index up 1.7%

March final manufacturing PMIs

  • UK at 54.4 (highest since July 2014) , expecting 54.3 and vs. Feb final of 54.0
  • Euro zone at 52.2, expecting 51.9 and vs. Feb final of 51.0
  • German at 52.8, expecting 52.4, and vs. Feb final of 51.1
  • French at 48.8 , expecting 48.2 and vs. Feb final of 47.6
  • Italy at 53.3 (highest since April 2014) vs. Feb final of 51.9
  • Japan at 50.3 , expecting 50.4 and vs. Feb final of 51.6
  • China’s HSBC at 49.6 expecting 49.2 and vs. Feb final of 50.7
  • China’s official at 50.1 , expecting 49.7 and vs. Feb final of 49.9

Weekly API energy inventory report from yesterday:

  • Crude a build of 5.2 MB expecting a build of 4.2 MB
  • Gas a draw of 4.1 MB expecting a draw of 900,000 barrels
  • Distillates a build of 18,000 barrels expecting a draw of 286,000 barrels

China grain closings = beans up 15, corn down 3, meal up 37, palm oil down 2, and bean oil down 8

Malaysian palm oil down 11

Today is the beginning of a new month.

South Korea KFA bought 63,000 tons of optional origin corn for Nov shipment

South Korea MFG bought 134,000 tons of optional origin corn for October shipment

India bought 70,000 -80,000 tons of Australian wheat for April- May shipment

Japan seeks 120,000 tons of feed wheat and 200,000 tons of feed barley via SBS tender for July shipment

South Korea canceled tender to buy 25,000 tons of rice for June shipment

AgRural said Brazilian farmers have sold 2% of their ‘15/16 bean crop as of March 27th. Brazilian farmers didn’t start selling new crop beans until May of last year.

AgRural said Brazilian farmers have sold 53% of their ‘14/15 bean crop as of March 27th vs. 40% a month ago and vs. 63% a year ago

AgRural said as of March 27th Brazilian farmers had harvested 69% of their bean crop vs. 59% a week ago and vs. 71% a year ago

AgRural estimated Brazil’s ‘14/15 bean crop at 93.4 MMT

Russia bought 26,460 tons of intervention grain , total bought since September 30th 516,760 tons. Government plans to buy 5.0 MMT of intervention grain this season.

Kazakhstan Ag Min estimated Kazakhstan’s 2015 grain crop at 17.2 MMT unchanged from 2014.

Kazakhstan Ag Min estimated 2015 total grain planting area at 21.5 MH

Kazakhstan Ag Min estimated ‘14/15 grain exports at 7.0 MMT, Kazakhstan has already exported 4.7 MMT of grain this season.

Today is the last day of the Rogers roll. They have been rolling long May positions into July.

Cordonnier’s weekly crop estimates

  • ‘14/15 Brazilian bean crop estimated at 93.0 MMT, unchanged from his previous estimate
  • ‘14/15 Brazilian corn crop estimated at 75.0 MMT, vs. previous estimate of 74.0 MMT
  • ‘14/15 Argentina bean crop estimated at 57.0 MMT, vs. previous estimate of 56.0 MMT
  • ‘14/15 Argentine corn crop estimated at 23.0 MMT unchanged from previous estimate

Chinese industry analysts, weekly Chinese crush breakdown:

  • For the week March 21-27th total crush volume at 1,364,500 tons down 11.61% from a week ago
  • For the week March 21-27th total crush capacity utilization at 44.73% down 5.92% from a week ago
  • Total ‘14/15 (Oct 1, 2014 –March 27, 2015) crush volume at 35,003,700 tons up 3.89% from a year ago
  • Total 2015 (Jan 1 –March 27) crush volume at 16,239,700 tons up 7.31% from a year ago
  • As of March 27th total imported bean stocks at 4.0693 MMT vs. 4.1883 MMT a week ago and down 22.17% from a year ago
  • Estimated March bean imports at 4.948 MMT, unchanged from previous estimate
  • Estimated April bean imports at 5.30 MMT vs. previous estimate of 5.5 MMT
  • Estimated May bean imports at 6.50 MMT unchanged from previous estimate
  • Estimated June bean imports at 7.00 MMT, vs. previous estimate of 6.2-6.3 MMT

Receipt Registrations as of yesterday afternoon – no changes

  • Wheat = 0
  • Oats = 0
  • Corn =59
  • Ethanol =175
  • DDGs = 0
  • Beans = 1
  • Bean oil = 3,335
  • Soy meal = 0
  • Rice = 1,307
  • KC wheat = 295
  • Minneapolis wheat =  357

Moving averages:

  • SK 20 day 976 ½
  • SK 50 day 986 ½
  • CK 20 day 385 ¼
  • CK 50 day 388 ½
  • WK 20 day 508 ¼
  • WK 50 day 513 ¼
  • KC WK 20 day 548 ¼
  • KC WK 50 day 550 ½
  • MWK 20 day 573 ½
  • MWK 50 day 572 ¾
  • BOK 20 day 3080
  • BOK 50 day 3138
  • SMK 20 325.80
  • SMK 50 day 328.40
  • SMK 100 day 336.30
  • SMK 200 day 338.20

Open interest as of yesterday’s close:

  • Total corn 1,352,918 open, up 16,910
  • Total beans 765,313 open, up 13,105
  • Total meal 346,637 open, up 6,236
  • Total bean oil 383,784 open, up 3,309
  • Total wheat 434,023 open, up 341
  • Total KC wheat 154,866 open, down 116

Upcoming reports/events

  • Weekly DOE energy inventory report comes out today at 930 am CST. Expecting
  1. Crude a build of 4.2 MB
  2. Gas a draw of 900,000 barrels
  3. Distillates a draw of 300,000 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.
  • See attachment for Good Friday trading schedule. Grain markets will be closed. Interest rates will be open until 10 am CST, due to unemployment
  • Unemployment comes out Friday April 3rd at 730 am CST.
  • Weekly USDA crop progress report resumes Monday. Reports come out every Monday at 3 pm CST
  • USDA April crop production and supply and demand report comes out on Thursday April 9th at 11 am CST.
  • CONAB comes out Friday April 10thwith their 2015 Brazilian crop estimate updates . Previous estimates were
    • Bean crop estimated at 93.3 MMT
    • Corn crop estimated at 78.2 MMT
    • Bean exports estimated at 46.8 MMT
    • Malaysian Palm Oil Board comes out on Friday April 10thwith their March Malaysian palm oil data report. Previously
      • Feb palm oil output was 1.122 MMT
      • Feb palm oil stocks were 1.743 MMT
      • Feb palm oil exports were 971,640 tons
      • Brazilian truckers threaten new strike on April 22nd
      • Stats Canada comes out with Canadian production estimates on Thursday April 23rd
      • USDA to restart monthly Census crush reports in July 2015.Data sources: DowJones , Bloomberg, Reuters , DTN news, barchart.com, CME Group and NYSE