From: Grohsmeyer, Alex [email@example.com]
Sent: Monday, December 02, 2013 4:45 PM
To: Undisclosed recipients:
Subject: Advance Insight - 12/2/13
Attachments: AI 120213.pdf
March corn closed unchg at 424.5. Gold continued its slide with futures at 1219.4 as of 4:13 cdt. Its Aug 28th high was 1434. With some economic signals showing a little life some may be anticipating a slowdown in Fed Bond buying. There was talk of 2 more US corn cargoes and 209 containers being rejected in China but after making a new contract low of 418.5 early, corn rebounded in what may have been an unwinding of bean/corn spreads. EU prod was estimated by the EC at 65.1mmt vs. prev of 65.9 and barley at 59 (dn .2). CFTC report showed cmcls sold another 33mbu increasing their short to 250mbu and indicating they more than replaced this week’s usage. Basis in Decatur dropped to 0CH (dn7) and other levels felt generally weak. However our general consensus is the farmer movement is not going to be sufficient at the current time given the current price. Exports were 35.6mbu vs. 27.8 needed BOY with milo checking in at 268kbu vs. BOY of 3.7mbu. Cmcls are still not putting out Dely’s vs. the CZ which would indicate they are not comfortably long the basis.
Export inspections a little disappointing at 52.6 MBU with expectations from 55-90, although only 21 needed to meet USDA forecasts. Brazil is estimated to be 89% planted, 4 ahead of last year. Only 1 boat in Brazil vessel line up; which makes sense in that vessels CIF Brazil are about 150 higher than CIF NOLA for December. By February, they are about 50 lower than NOLA. USDA Argentine attaché estimate Argentine crop at 57.7 MMT vs. USDA at 53.5. South American weather is okay. Processor bids tonight are generally unchanged with the range from up 13 to down 10. River values are firm enough to keep the SF/SH inverted. E.g. Upper IL Jan truck bids around +18 SF. Per COT report soybean users are futures long of 155,000 caks and is tied with the size of the long in 4 of the last 6 years. Exporter is not in position to give up his SF longs, yet. Interestingly, the “net” of the “Commercials” is short 219,507 caks, which with futures inverted, is hard to make sense out of.
Wheat futures took a shot at trading higher early in the overnight session with light fund buying to start the month, but the usual Monday combination of light volume and limited fundamental news to feed the bulls faded prices midsession and a nickel lower close across all three exchanges. The weekly inspection total of 15.5 mbu was a tick better than last week’s 12.6, but now falling into a pattern of being very “ordinary” after the early season rush. Balance of the year inspections need to average 17.0 mbu for all-wheat to meet the USDA objectives. By class, HRS showed some life jumping to 4.2 mbu this week vs 1.5 mbu last week. Year-to-date shipments are virtually unchanged vs last year for spring wheat, though the unshipped sales are sharply higher which is opposite the HRW/SRW position. Inability to effectively price or utilize spring wheat in lieu of HRW is pointing towards a very comfortable spring wheat balance sheet next year. StatsCan will post some new production #’s on Wednesday AM and guesses are trending higher with an all wheat estimate just shy of 34 MMT vs 33 MMT in October. Spring wheat is expected to comprise 24.5 of that total. There have been increasing problems with logistics getting the bigger crop out of Canada though, with blame spread across weather, railroads, and a general sense of confusion as new processes are established post-monopoly. While it would seem logical that US mills who had Canadian wheat booked would turn to US Spring, the emphasis has been towards finding HRW replacement bushels prompting a firmer tone to HRW basis. It’s December and it’s supposed to be cold, but lack of snow-cover in parts of upper-Midwest will merit some monitoring for winter-kill. Delivery surprise was in KC with 200 contracts issued by JP Morgan out of Salina. Egypt in the market tonight for a late December tender and Iran still supposedly looking for wheat credits is the extent of export demand highlights. Australian yields might be a little disappointing compared to early guesses. CFTC data released Monday afternoon has the funds in Chicago wheat at a record-short 100K+ contracts, which represented 8K contracts sold last week.
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