News From The Grain Floor 10/12/15

US government closed today for holiday. No USDA announcements.

Overnight closes

  • SX up 5 ¾ at 891 ½
  • CZ down a ½ at 382 ¼
  • WZ down 2 ¾ at 506 ½
  • KC WZ down 1 ¾ at 498 ½
  • MWZ down 1 ½ at 528
  • SMZ up .10 at 307.90
  • BOZ up 40 at 2874

Overnight volume

  • SX 31,340
  • CZ 27,932
  • WZ 6,919
  • KC WZ 670
  • MWZ 205
  • SMZ 5,537
  • BOZ 12,462

Overnight option volume

  • Corn 4,237
  • Wheat 193
  • Beans 7,560
  • Meal 234
  • Bean oil 267

Total EOO’s cleared from previous session

Contract Year Month

Product Desc

P/C Ind

Strike Price

Ex Pit Volume – CME Group

201603

CORN OPTIONS

P

440

1,400

Funds / COT

The latest COT showed more net longs in corn than expected as a decent amount of short covering took place (36k lots) in addition to 19k new longs…so the COT had funds long 52k corn as of Tuesday; some selling took place since then especially after the report Friday which means funds are estimated to be long 30k lots of corn as of this morning. In wheat new long and some small short covering took the fund position to -54k as of last Tuesday (-66k as of this morning). Soybeans saw some small short covering with funds estimated to be short 29k as of this morning. The meal position stayed unchanged while the remaining of the bean oil short was covered.

 

COT

COT

COT

 

 

 

Current

COT Record

 

COT Record

 

 

29-Sep

6-Oct

to COT

7-Oct

8-Oct

9-Oct

Estimate

Long

 

Short

 

Corn

-2411

52065

54476

-5000

-6000

-11000

30065

9/28/2010

372756

-240854

10/29/2013

Wheat

-68560

-54371

14189

-5000

-4000

-3000

-66371

10/24/2006

30146

-110792

5/5/2015

Soybeans

-36889

-29940

6949

4000

-8000

5000

-28940

5/1/2012

224822

-92991

5/26/2015

Soymeal

29711

28771

-940

2000

-3000

3000

30771

11/11/2014

70115

-22711

4/14/2015

Soyoil

-16467

853

17320

-2000

-2000

-2000

-5147

4/10/2007

81193

-80562

1/21/2014

Updated S&Ds following October USDA report

In last Friday’s USDA report, the government increased slightly the corn yield to 168 bushels per acre (vs 167.5 in September) while moving up just a touch the bean yield to 47.2 (vs 47.1 last month). The corn yield was expected to be cut and the bean yield was expected to be moved a bit more on the upside so the report created a wave of bean buying vs corn selling. The acres were cut in corn, beans and wheat: corn harvested acres were down 400k, beans were down 1.1 million and wheat were down 1.4 million. So production was not much changed in spring grains with a bigger cut in all wheat production: corn down 30 million bushels at 13.555 bbu, beans 47 mbu at 3.888 bbu and all wheat down 84 mbu at 2.052 bbu. The USDA will update the yields/production again in November and January (final crop production)…at this stage, supply is adequate especially in beans with many analysts questioning the exports in corn and beans. Corn exports were left unchanged in this report at 1.850 while bean exports were cut 50 million bushels at 1.675 which is justified by the current export pace. Regarding the world numbers, the USDA lowered world corn stocks to 187.83 MMT (vs 189.69 last month), the world wheat stocks were increased to 228.49 MMT (vs 226.56 last month) and the soybean world stocks were seen at 85.14 MMT (vs 84.98 last month).

US CORN S&D

USDA

USDA

USDA (Sep)

USDA (Oct)

SEP/AUG

2013/14

2014/15

2015/16

2015/16

Planted Acres

95.4

90.6

88.9

88.4

Harvested Acres

87.5

83.1

81.1

80.7

% Harvested

91.7

91.7

91.2

91.3

 

 

 

 

 

Yield

158.1

171

167.5

168

 

 

 

 

 

Carry In

821

1232

1732

1731

Production

13829

14216

13585

13555

Imports

36

32

30

30

Total Supply

14686

15479

15347

15316

 

 

 

 

 

Feed and Residual

5040

5317

5275

5275

FSI

6493

6566

6630

6630

     Ethanol

5124

5207

5250

5250

Exports

1920

1864

1850

1850

Total Use

13454

13748

13755

13755

 

 

 

 

 

Carry out

1232

1731

1592

1561

Stock to Use Ratio

9.16

12.59

11.57

11.35

 

 

US SOYBEANS S&D

USDA

USDA

USDA (Sep)

USDA (Oct)

SEP/AUG

2013/14

2014/15

2015/16

2015/16

Planted Acres

76.8

83.3

84.3

83.2

Harvested Acres

76.3

82.6

83.5

82.4

% Harvested

99.3

99.2

99.1

99.0

 

 

 

 

 

Yield

44

47.5

47.1

47.2

 

 

 

 

 

Carry In

141

92

210

191

Production

3358

3927

3935

3888

Imports

72

33

30

30

Total Supply

3570

4052

4175

4109

 

 

 

 

 

Crush

1734

1875

1870

1880

Exports

1638

1843

1725

1675

Seed

97

97

92

92

Residual

10

46

38

38

Total Use

3478

3861

3725

3685

 

 

 

 

 

Carry out

92

191

450

425

Stock to Use Ratio

2.65

4.95

12.08

11.53

US WHEAT S&D

USDA

USDA

USDA (Sep)

USDA (Oct)

JUNE/MAY

2013/14

2014/15

2015/16

2015/16

Planted Acres

56.2

56.8

56.1

54.6

Harvested Acres

45.3

46.4

48.5

47.1

% Harvested

80.6

81.7

86.5

86.3

 

 

 

 

 

Yield

47.1

43.7

44.1

43.6

 

 

 

 

 

Carry In

718

590

753

753

Production

2135

2026

2136

2052

Imports

173

149

125

125

Total Supply

3026

2766

3014

2930

 

 

 

 

 

Food

955

958

967

967

Seed

77

81

72

72

Feed and Residual

228

120

200

180

Exports

1176

854

900

850

Total Use

2436

2013

2139

2069

 

 

 

 

 

Carry out

590

753

875

861

Stock to Use Ratio

24.22

37.41

40.91

41.61

News

Dec Euro at 1.1381 up .0004

USD – BRL at 3.7633 down .0220

US government is closed today for holiday. US grain markets are opened. Weekly US reports delayed one day due to US holiday.

Japanese , Canadian, Brazilian, and Mexican markets closed today for holiday, trading resumes tomorrow.

Nikkei closed for holiday, trading resumes tomorrow

Hang Seng closes up 1.2%

Shanghai Index closes up 3.3%

Renewed strength in China markets

  • Over weekend China’s central bank took fresh steps to inject liquidity into the struggling economy and said the stock market’s correction “is almost over”

OPEC monthly report came out this morning . Headlines from Dow Jones.

  • OPEC ups global oil demand forecast by 40,000 B/D in 2015
  • OPEC’s crude production up by 109,000 B/D in September
  • OPEC upgrades demand for its own crude up by .5M B/D in 2016
  • OPEC sees US output down by about 60,000 B/D next year
  • Non-OPEC output down by .13M B/D next year instead of growth
  • OPEC downgrades non-OPEC production view by .29M B/D in 2016
  • OPEC worried about ‘enhancing OPEC’s image’
  • OPEC argues over oil revenue goals: ‘Fairness” vs. Maximization
  • OPEC worried about ‘liability concerns’ in US and EU
  • OPEC looks to tighten ties to Asia
  • OPEC Chief sees oil price rising on investment cuts
  • OPEC Chief open to talk with the US but sees is as challenging
  • Qatar Oil Minister says oil prices have bottomed out
  • Qatar Oil Minister sees signs of recovery in 2016
  • Qatar Oil Min says non-OPEC supply growth likely to reach zero or be negative in 2016
  • Qatar Oil Min says call on OPEC to become healthier and hit 30.5 B/D in 2016

China grain markets closes – soybeans up 27, corn down 16, soy meal unchanged, palm oil up 80, and bean oil up 88.

Malaysian palm oil market closed up 42

Saudi Arabia bought 740,000 tons of optional origin hard wheat , likely from the EU for Dec-Feb shipment

China eyeing US bean cargoes for November shipment on Friday from the PNW

Syria canceled tender to buy 200,000 tons of wheat for April shipment

Syria retenders to buy 200,000 tons of wheat

Iraq bought 80,000 tons of rice from India and the US.

Malaysian Palm Oil Board came out this morning with their September palm oil data report

  • September palm oil output at 1,959,064 tons , expecting 2,092,000 tons, vs. 2,051,000 a month ago and vs. 1,896,901 tons a year ago
  • September palm oil exports at 1,678,134 tons , expecting 1.65 MT , vs. 1,607,986 a month ago and vs. 1,643,294 tons a year ago
  • September palm oil ending stocks at 2,628,329 tons, expecting 2.65 M tons, vs. 2,492,206 tons a month ago and vs. 2,090,529 tons a year ago

SGS estimated Malaysia’s Oct 1-10th palm oil exports at 514,972 tons down 9.5% from a month ago

Intertek Agri Services estimated Malaysia’s Oct 1-10th palm oil exports at 459,379 tons down 11.25% from a month ago

Indonesia Palm Oil Association said Indonesia exported 2.3 MMT of palm oil in September vs. 2.1 MMT in August

Egypt’s supplies minister said Egypt has enough wheat reserves to last until mid-March

Favorable US Midwest harvest weather

Concerns about dry weather in Black Sea region continues

Concerns about dry weather in Australia continues.

Today is the fourth day of the Goldman Sachs / UBS roll. They are rolling long Nov bean and Dec bean oil and soymeal positions into Jan. Roll ends tomorrow.

 Deliveries

  • Bean oil 57 with the date at 10-02-15
  • Soy meal 0
  • Ethanol  0

Moving averages:

  • Nov bean 20 day 880 ½    
  • Nov bean 50 day 894 ¼       
  • Dec corn 20 day 386 ¾
  • Dec corn 50 day 380 ¾    
  • Dec corn 100 day 389   
  • Dec corn 200 day 397 ½   
  • Dec wheat 20 day 504 ½
  • Dec wheat 50 day 499 ½     
  • Dec KC wheat 20 day 497  
  • Dec KC wheat 50 day 495 ½
  • Dec Minneapolis wheat 20 day 523 ¾  
  • Dec Minneapolis wheat 50 day 522 ½
  • Dec meal 20 day 306.70
  • Dec meal 50 day 312.60
  • Dec meal 100 day 315.90
  • Dec meal 200 day 316.10
  • Dec bean oil 50 day 2802

Receipt Registrations as of Friday afternoon:

  • Wheat = 827
  • Oats = 13
  • Corn = 642
  • Ethanol = 6
  • DDGs = 0
  • Beans = 69
  • Bean oil = 3,024
  • Soymeal = 78
  • Rice = 2,616
  • KC wheat = 223
  • Minneapolis wheat =  674

o   40 Minneapolis wheat receipts were canceled Friday afternoon

Open interest as of Friday’s close:

  • Total corn – 1,279,856 open, down 14,830
  • Total soybeans –711,559 open, up 14,916
  • Total soymeal – 392,595 open, up 13,506
  • Total bean oil – 414,865 open, up 4,969
  • Total wheat –369,846 open, up 2,951
  • Total KC wheat – 186,222 open, down 825

Upcoming reports/events:  

  • US government is closed today for holiday. US grain markets are opened. Weekly US reports delayed one day due to US holiday.
  • China’s September trade balance report comes out tonight / tomorrow morning
  • Weekly US export inspections comes out tomorrow at 10 am CST.
  • US crop progress report comes out tomorrow at 3 pm CST. Expecting

o   Corn harvest 40-45% complete

o   Bean harvest 60-65% complete

  • China’s PPI and CPI comes out on Wednesday
  • FSA US acreage data comes out on Wednesday
  • Last trading day of October soy meal and bean oil is Wednesday. Futures expire at noon CST
  • NOPA September crush report comes out on Thursday at 11 am CST
  • Chinese government to issue 3rd quarter GDP on Monday October 19th

o   Economists at ANZ said China’s third quarter GDP growth is likely to have slowed to 6.4%.

  • 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
  • ABARES come out on Tuesday December 1st with their Australian crop estimate updates
  • OPEC to meet in early December

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