From: Grohsmeyer, Alex [firstname.lastname@example.org]
Sent: Friday, September 27, 2013 4:50 PM
To: Undisclosed recipients:
Subject: Advance Insight - 9/27/13
Attachments: AI 092713.pdf
Reports of good to excellent corn yields continue to pressure the board. Central Belt is or will be getting some rain through Sunday, but then several days of dry weather, thus an increasing pace of harvest. Several have expressed that the piling of corn on the ground has went from a probability to a certainty. Spot corn basis is erratic. E.g. as of mid-morning Clinton had lowered spot basis 15 to +25, Cedar was steady at +70 and Eddyville raised theirs by 15 to +5. A BNSF shipper reports a 25 cent drop in the spot bid TW and a BNSF buyer reports offers are only lower for later in October. CIF up 1 at 61/64. Brazil adds 1 vessel to corn line-up, 82 with estimated volume 3 higher at 173 mbu. BA Exchange says Argentine corn planting gained 2 points to 5% complete. Northern areas of Argentina still need 2 – 3 inches of rain to break the drought. This fall’s farmer selling pattern remains a point of discussion. At the risk of over-simplification, the reason not to sell is because one thinks prices are going higher. There are several ways the farmer can get rid of his physical corn and be long the market. And if the farmer gives up on the market going back up, what is his reason not to sell? All we know is that so far his selling pace is, or is near, record slow, so far.
Mixed day ahead of the Sep 1 stocks report with an average trade estimate of 124 mbu. Next week looks like it will be a big bean harvest week. Several plants lowered posted bids 10 – 20c as they try to converge to new crop values. Between Oct barge frt at 625% and BNSF cars of $1,500, there is a lot of incentive for those with space to hold beans 30 – 60 days and utilize cheaper freight post-harvest. At current values it feel as though the market may need to narrow the cash carry from Oct to Dec to fill the nearby pipeline. Unless the farmer bails out the end-user. Yield reports continue to point toward a national yield of 42 bpa or better. China has been mostly on the sidelines for their LH Dec/Jan/FH Feb needs as ocean freight rates have raised CNF values. Spot Chinese crush margins remain strong. Monday is FND for Oct futures with no meal deliveries and 1k soyoil expected.
Spring wheat led the push higher today in the wheat complex as Corn was weaker and soybeans were mixed. Hard to fabricate much news for the day with most waiting for Monday’s USDA report. Iraq made no purchase in their latest tender. There was a report of 121K tonne purchase to unknown destinations for this marketing year. Winter Wheat drills are running as fast as they can to get seed in the ground before a chance of moisture tonight and tomorrow morning for the plains. The last of the US Spring wheat harvest continues to be slowed down by rain. Always an interesting harvest up north when you are taking wheat, soybeans and canola at the same time. Minneapolis climbed back to a premium vs KC today. Decent strength/rebound has been shown in Spring wheat basis this last week climbing back 15 c from Monday for 13.0 pro. HRW saw an uptick for 12’s at the Texas gulf tonight while KC high sides were unchanged. The focus in many wheat shipping regions will turn to row crops this week, that could explain the rebound in the HRS we saw this week. Spreads in HRS and HRW are not very attractive today for the warehouse, logistics will continue to be the name of the game. Mondays small grains report should shed some light to our 1st quarter feed residual debate. HRW avg production estimate was .792 bln bu, SRW avg estimate is at .545 and other Spring is at .509 all within a couple million bu of the Sept USDA estimates. Like mentioned before the big question to answer will be how much SRW and HRW was this last summer.
This data is provided for information purposes only and is not intended to be used for specific trading strategies without consulting Advance Trading, Inc. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Past results are no indication of future performance. All information is based upon data that is believed to be reliable, but its accuracy is not guaranteed. Please see http://www.advance-trading.com/index.php/disclaimer for full disclaimer