News From The Grain Floor 09/29/15

South American Weather

In Brazil, there were a few showers in Mato Grosso yesterday but coverage was low…other grain areas were dry. Heat was noted in northern areas while normal/cool conditions continued in the south. Over the next 10 days we’ll have rains across southern Brazil from / adjacent Parana. After today, areas north of that will stay dry and that will limit early planting of beans in Goias and Mato Grosso. The lack of rains in these states is a bit unusual  but deficits since September 15 only range from 0.75” to 1.50”.  In Argentina, temps are cooler than average over the next 10 days. The cool fronts will trigger a few showers but that should be minimal. This lack of heavy rain will allow corn and sunflower planting to advance but may leave some wheat areas too dry given these areas got limited precipitation since mid-August.  See maps below.

Today is position day for October soy meal and bean oil. Traders should be out of long positions by today’s close or risk delivery.

  • As of yesterday afternoon open interest in October soy meal is 15,097 open, down 7,673 , and there are 10 soy meal receipts opened
  • As of yesterday afternoon open interest in October bean oil is 15,881 open, down 2,341 , and there are 3,024 bean oil receipts opened

No 8am USDA announcements this morning

Overnight closes

  • SX up 3 ¼ at 880
  • CZ up 1 ¼ at 388
  • WZ down 2 ½ at 503
  • KC WZ down 2 ½ at 495
  • MWZ down 2 ¼ at 520 ½
  • SMZ up .30 at 304.40
  • BOZ up 24 at 2761

Overnight volume

  • SX 12,639
  • CZ 11,182
  • WZ 5,700
  • KC WZ 670
  • MWZ 145
  • SMZ 7,149
  • BOZ 19,731

Overnight option volume

  • Corn 2,437
  • Wheat 737
  • Beans 2,992
  • Meal 105
  • Bean oil 368

Total EOO’s cleared from previous session

Contract Year Month

Product Desc

P/C Ind

Strike Price

Ex Pit Volume – CME Group

201512

CORN OPTIONS

P

400

111

201512

CHICAGO SRW WHEAT OPTIONS

P

530

59

201512

CORN OPTIONS

P

410

10

Funds

 

COT

COT

COT

 

 

 

 

Current

 

15-Sep

22-Sep

to COT

23-Sep

24-Sep

25-Sep

28-Sep

Estimate

Corn

659

-1375

-2034

3000

-2000

8000

-6000

1625

Wheat

-83660

-78152

5508

7000

-4000

4000

-3000

-74152

Soybeans

-41433

-57866

-16433

-2000

5000

12000

-7000

-49866

Soymeal

44863

27963

-16900

-4000

0

4000

-3000

24963

Soyoil

-30717

-32460

-1743

2000

5000

6000

-6000

-25460

News

Dec Euro at 1.1223 down .0020

Nikkei closes down 4.05%

Hang Seng markets closes down 3.0% , two year low

Shanghai Index closes down 2.0%

Concerns about global economy continue.

Concerns about China’s economy continue. China’s official September PMI comes out on tomorrow night/Thursday morning.

China grain markets closings – beans up 10, corn down 24, meal down 26, palm oil down 70, and bean oil down 48

Malaysian palm oil market closed up 57, 15 month highs

Veg Oil conference in India continues, concludes tomorrow

  • Pakistan 2015 oilseed imports estimated at 1.58 MMT vs. 1.18 MMT a year ago

Analyst James Fry

  • Said crude palm oil seen rising 40% from current levels to $700/T FOB by mid-2016
  • Said crude palm oil seen rising 20% from current levels to $600/T FOB by 1st quarter of 2016
  • Global palm oil output in 2016 could fall below 2015 level due to El Nino and lower fertilizer usage
  • Bean oil could trade in discount to palm oil by mid-2016

Analyst Thomas Mielke

  • ‘15/16 global soymeal exports estimated at 67.5 MMT up 3-3.5 MMT from ‘14/15
  • Estimated ‘15/16 ending global soybean stocks at 87-88 MMT (record)
  • Estimated ‘15/16 global soybean crushing at 273 MMT up 15 M from a year ago
  • Estimated ‘15/16 world soymeal demand at 214.2 MMT vs. 201.1 MMT in ‘14/15
  • Said December meal futures could fall to $280-$290, Dec meal currently at 304.40

South Korea seeking soy meal for Feb-March shipment

Mauritius seeks 51,000 tons of optional origin wheat flour.

Japan seeks 128,489 tons of food wheat for Oct-Nov shipment . Breakdown

  • 18,510 tons of US western white wheat
  • 17,220 tons of US HRW wheat
  • 27,530 tons of US dark northern spring wheat
  • 32,714 tons of Canadian western red spring wheat
  • 32,515 tons of Australian white wheat

Russia’s Prime Minister to decide today on possible wheat export tax cut from October 1st  

Reports of very high bean yields in many areas of Illinois , Iowa , and Minnesota

AgRural said Brazilian soybean planting is 1.7% complete vs. 1.6% a year ago and vs. 1.3% five year average

Favorable harvest weather in Manitoba , good harvest progress .

Concerns about dry weather in Malaysia and Indonesia continues.

Weekly US crop progress report from yesterday afternoon

Corn

  • Condition 68% good to excellent , unchanged from a week ago, and vs. 74% a year ago
  • Harvested 18% (expecting 16-23%) vs. 10% a week ago and vs. 23% five year average
  • Dented 97% vs. 94% a week ago and vs. 97% five year average

 Soybeans

  • Condition 62% good to excellent, down 1% from a week ago and vs. 72% a year ago
  • Harvested 21% (expecting 14-22%) vs. 7% a week ago and vs. 16% five year average
  • Dropping leaves 74% vs. 56% a week ago and vs. 70% five year average

Winter wheat

  • Planted 31% (expecting 31-38%) vs. 19% a week ago and vs. 35% a year ago
  • Emerged 7% vs. 13% a year ago and vs. 11% five year average

Rice

  • Harvested 69% vs. 55% a week ago and vs. 63% five year average  

Cotton

  • Condition 50% good to excellent down 2% from a week ago and vs. 49% a year ago
  • Harvested 11% vs. 7% a week ago and vs. 12% five year average
  • Bolls open 69% vs. 57% a week ago and vs. 70% five year average

Moving averages:

  • Nov bean 20 day 875 ¼   
  • Dec corn 20 day 378 ¾
  • Dec corn 50 day 381 ¾      
  • Dec corn 100 day 388
  • Dec corn 200 day 399 ½   
  • Dec wheat 50 day 500
  • Dec KC wheat 50 day 499 ½    
  • Dec Minneapolis wheat 20 day 513 ¾      
  • Dec meal 20 day 308.10
  • Dec bean oil 20 day 2700

Receipt Registrations as of yesterday afternoon: – no changes.

  • Wheat = 827
  • Oats = 13
  • Corn = 642
  • Ethanol = 0
  • DDGs = 0
  • Beans = 69
  • Bean oil = 3,024
  • Soymeal = 10
  • Rice = 2,616
  • KC wheat = 223
  • Minneapolis wheat =  773

Open interest as of yesterday’s close:

  • Total corn – 1,288,985 open, down 4,270
  • Total soybeans – 699,134 open, down 7,077
  • Total soymeal – 374,619 open , down 7,016
  • Total bean oil – 417,618 open, up 3,342
  • Total wheat – 368,382 open , down 8,935
  • Total KC wheat – 185,464 open , down 1,249

Upcoming reports/events:

  • Rogers index fund roll for Nov beans and Dec meal and bean oil begins today. They will be rolling long Nov / Dec positions into Jan. Roll runs for 3 days.
  • Weekly API energy inventory report comes out today at 330 pm CST.
  • Euro zone unemployment comes out on tomorrow.
  • Surveyors SGS and Intertek come out tomorrow with their Malaysian September palm oil export estimates
  • Weekly DOE energy inventory report comes out tomorrow at 930 am CST . Expecting

o   Crude a draw of 500,000 barrels

o   Gas a draw of 500,000 barrels

o   Distillates a draw of 1.0 MB

  • Weekly US ethanol plant production report comes out tomorrow at 930 am CST.
  • USDA quarterly grain stocks report comes out tomorrow at 11 am CST . See below for estimates for USDA report
  • First notice day for October soy meal and bean oil is tomorrow
  • Global September final PMIs come out on tomorrow night/Thursday morning
  • China’s Golden Week starts Thursday. China markets will be closed from Oct 1st through October 7th.
  • Census crush data comes out on Thursday after being discontinued four years ago. The crush data will cover May-August crush. The report comes out at 2 pm CST
  • US September unemployment report comes out Friday at 730 am CST
  • Stats Canada will update Canadian crop estimates on Friday Stats Canada comes out at 730 am CST.

o   All wheat average estimate 25.1 MMT vs. August estimate of 24.625 MMT and vs. 2014 crop of 29.419

o   Durum average estimate 4.7 MMT vs. August estimate of 4.467 MMT and vs. 2014 crop of 5.1927 MMT

o   Canola average estimate 14.5 MMT vs. August estimate of 13.343 MMT and vs. 2014 crop of 16.41 MMT

o   Oats average estimate 3.4 MMT vs. August estimate of 3.31 MMT and vs. 2014 crop of 2.979

o   Barley average estimate 7.3 MMT vs. August estimate of 7.305 MMT and vs. 2014 crop of 7.119 MMT

o   Corn average estimate 12.3 MMT vs. August estimate of 12.312 MMT and vs. 2014 crop of 11.4868 MMT

o   Beans average estimate 5.8 MMT vs. August estimate of 5.8569 MMT and vs. 2014 crop of 6.0486 MMT

  • Goldman Sachs / UBS index fund roll for Nov beans and Dec meal and bean oil begins Wednesday October 7th. They will be rolling long Nov / Dec positions into Jan. Roll runs for 5 days.
  • Argentina president elections on October 25th

o   Peronist presidential candidate Scioli , who is leading in the polls, may favor a Argentina export tax cut of 5%, Argentina presidential elections are on October 25th.

o   Argentina’s leading opposition candidate Macri told farm groups yesterday he would lower soybean export taxes and lift quotas on wheat and corn shipments

  • US EPA reaffirms plan to finalize biofuels plan by the end of November
  • OPEC to meet in early December

USDA comes out tomorrow with quarterly stocks and small grains report. Report comes out at 11 am CST

Estimates for US quarterly grain stocks as of September 1st

  • Wheat – (22 analysts surveyed) average estimate 2.149 BB , range of estimates are 1.987-2.285 BB, June 1st wheat stocks were .753 BB and September 1 2014 wheat stocks were 1.907 BB
  • Corn – (23 analysts surveyed) average estimate 1.739 BB , range of estimates are 1.647-1.850 BB, June 1st corn stocks were 4.447 BB and September 1 2014 corn stocks were 1.232 BB
  • Beans – (23 analysts surveyed) average estimate .205 BB , range of estimates are .165-.250 BB , June 1st bean stocks were .625 BB and September 1 2014 bean stocks were .092 BB

Estimates for US 2015 wheat production

  • All wheat production – (21 analysts surveyed) average estimate 2.133 BB, range of estimates are 2.105-2.160. USDA August estimate was 2.136 BB and US 2014 all wheat production was 2.026 BB
  • All winter wheat production – (20 analysts surveyed) average estimate 1.430 BB, range of estimates are 1.406-1.447 BB. USDA August estimate was 1.438 BB and US 2014 all winter wheat production was 1.378 BB
  • Hard red winter wheat production – (19 analysts surveyed) average estimate .855 BB, range of estimates are .845-.870 BB. USDA August estimate was .856 BB and US 2014 hard red winter wheat production was .738 BB
  • Soft red winter wheat production – (19 analysts surveyed) average estimate .383 BB, range of estimates are .360-.393 BB. USDA August estimate was .389 BB and US 2014 soft red winter wheat production was .455 BB.
  • White winter wheat production – (19 analysts surveyed) average estimate .192 BB, range of estimates are .185-.195 BB. USDA August estimate was .193 BB and US 2014 white winter wheat production was .184 BB
  • Other spring wheat production – (20 analysts surveyed) average estimate .625 BB, range of estimates are .615-.636 BB. USDA August estimate was .621 BB and US 2014 other spring wheat production was .595 BB
  • Durum wheat production – (20 analysts surveyed) average estimate .079 BB, range of estimates are .075-.082 BB. USDA August estimate was .077 BB and US 2014 durum wheat production was .053 BB

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