Wheat Comment 10-15-09
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Wheat Morning Update & Commentary An intra-day high of $5.30 was achieved in trade yesterday, a key objective on most technicians' charts. Wheat sold off quickly and struggled to remain positive through the close. Major importers of wheat are looking to take advantage of low prices with the slide in the U.S. Dollar. Egypt moved for wheat with Dec delivery in mind. Japan finalized its regular tender, buy 132k tons of wheat, including 90k US origin. Jordan moved for wheat yesterday. Bangladesh, Algeria and Morocco all remain around the market. Australian wheat stocks recorded their largest fall in 3 months, CBH confirmed this by saying it will have shipped 85% of the grain delivered to it by the end of this month, with a 15% cushion as the next season's harvest begins in the region. New currency strength in the Aussie may limit their competitiveness going forward. HRW basis is flat while freight remains firm. SRW Basis firmed ever so slightly with hope that the U.S. would compete for Egyptian business. Wheat output in Argentina for the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires Grain Exchange. The long term average size of the crop is 14.8 mln mt. Strategie Grains lowered its EU soft Wheat production figure to 129.0 mln mt from the prior month's 130.2 mln mt, but notes that supplies in the EU remain abundant. Look for buyers to move back into the market on signs of weakness. The market has factored in the huge world wide ...
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Page 1 of 3
312.896.2001
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be
reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for
informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates
may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
Wheat Morning Update & Commentary
An intra-day high of $5.30 was achieved in trade yesterday, a key objective on most technicians' charts.
Wheat sold off quickly and struggled to remain positive through the close.
Major importers of wheat are
looking to take advantage of low prices with the slide in the
U.S. Dollar. Egypt moved for wheat with
Dec delivery in mind.
Japan finalized its regular tender, buy 132k tons of wheat, including 90k US
origin. Jordan moved for wheat yesterday.
Bangladesh, Algeria and Morocco all remain around the
market. Australian wheat stocks recorded their largest fall in 3 months, CBH confirmed this by saying it
will have shipped 85% of the grain delivered to it by the end of this month, with a 15% cushion as the
next season's harvest begins in the region. New currency strength in the Aussie may limit their
competitiveness going forward.
HRW basis is flat while freight remains firm.
SRW Basis
firmed ever
so slightly with hope that the U.S. would compete for Egyptian business. Wheat output in Argentina for
the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires Grain Exchange.
The long term
average size of the crop is 14.8 mln mt.
Strategie Grains lowered its EU soft Wheat production figure to
129.0 mln mt from the prior month's 130.2 mln mt, but notes that supplies in the EU remain abundant.
Look for buyers to move back into the market on signs of weakness.
The market has factored in the
huge world wide supplies and for the time being the focus is the weak U.S. Dollar, fund influence and
weather concerns should they arise. Buying Corn – Selling Wheat becomes attractive at 130 premium in
the DEC but don’t be surprised if we test 145 to 150, objective is 100.
Overnight markets continue to see increased volume with Chicago trading 4327 contracts in the DEC.
Chicago closed down 7 1/2 cents. Kansas City finished overnight trade down 4 3/4 cents and MPLS
closed down 6 1/4 cents. Kansas City/Chicago spread is trading at 13 3/4 cents. The MPLS/Chicago
spread is at 29 1/2 cents. Euronext (Matif) Milling Wheat continues to gain with a last trade at $5.12/bu
USD in the Nov.
Globex Overnight
Contract
Last
Net Change
High
Low
Volume
ZWZ9
505^4
-7^4
512^6
504^0
4327
ZWH10
524^4
-7^4
530^4
523^6
1322
ZWK10
536^4
-8^2
540^6
536^4
9
ZWN10
549^0
-6^6
555^0
547^0
259
KEZ9
519^2
-4^6
523^0
518^6
980
KEH10
534^6
-4^4
538^6
534^6
78
MWEZ9
535^0
-6^2
539^6
535^0
172
MWEH10
553^4
-3^2
555^0
553^4
18
Early Opening Calls: off 5-7 cents
Top News
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Page 2 of 3
312.896.2001
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be
reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for
informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates
may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
-- Egypt's GASC tendering for 30k-60k tons of optional origin wheat, late Nov or early Dec shipment
-- Total UK wheat exports in the beginning months of the 09/10 marketing year were placed at 265,767
mt in customs data, well above the same period a year ago when exports were 186,514 mt
-- Spain takes in just over 57,000 mt of UK Wheat during August, out of the 100,000 mt the UK
exported during the month, acc. to British customs data
-- Wheat output in Argentina for the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires
Grain Exchange.
The long term average size of the crop is 14.8 mln mt.
-- US & Canadian wheat grower groups along with flour mill assoc. are meeting in KC a topic of
discussion at the meeting is GMO Wheat acceptance in the domestic & international market place
-- Overall harvest in Alberta is 91% complete, durum wheat is 99% done, while 93% of spring wheat is
finished also, acc. to the province's ag dept.
-- In a rebalancing act, an Ag exchange traded fund run by Deutsche Bank is expected to sell off
between 10-15,000 contracts of Corn & Wheat futures.
-- 132,000 mt of Wheat was bought by Japan's AG Ministry on Thursday inline with the announced
volume, acc. to ministry official.
The grain is for shipment in December
-- 50,000 mt of mill grade Wheat is being re-tender for by Algeria on Thursday, acc. to merchandisers.
The grain would be for November delivery
-- Strategie Grains lowered its EU soft Wheat production figure to 129.0 mln mt from the prior month's
130.2 mln mt.
The latest figure would put the 2009 crop 8% below last year's.
-- Strategie Grains however raised its EU Wheat export figure to 16.2 mln mt from the prior month's
15.2 mln mt on better overall global trade conditions
-- CBH of Western Australia says it will have shipped 85% of the grain delivered to it by the end of this
month, with a 15% cushion as the next season's harvest begins in the region
-- USDA's cattle on feed report will be released on Friday, Oct 16th, at 2 pm CDT.
Analysts expect the
on feed number as of Oct 1 at 100.0% of year ago, while Sept placements of animals is expected at
105% and marketings in Sep at 98%
-- Pending Tender: Total of 125,000 mt of various Wheat scheduled for export sale tender by Turkey on
October 15th, acc. to the country's state news agency.
They'll sell 50k mt of red mill Wheat, 50k mt of
white mill Wheat & 25k mt of durum.
-- Pending Tender: Oct 22nd is bid deadline in 200,000 mt Wheat buy tender floated by Morocco's state
grainary.
Delivery is expected by December 15th, acc. to traders
-- Pending Tender: Japan's Ag Ministry also floated Oct 29th SBS tender for 52,200 mt of food grade
Wheat
-- Pending Tender: 60,000 mt of optional origin Wheat is sought by Bangladesh's gov't in a November
16th tender deadline
-- Liffe Nov milling wheat futures were off -2.25 euro at 126.25 euros/mt.
-- Globex Wheat Vol. 70,193; Pit Vol. 3,834; Open Interest Change: + 451
-- Weather: 6-10 day Forecast: Normal to Below Temps. Above Normal Precip.
-- Outside markets: Energy Complex -0.04 at $75.14; Gold & Silver: -14.6 at $1050.1 & -0.453 at
$17.455; US $ +0.165 at $75.890
Cash Markets
-- CIF SR Wheat steady. Oct. -20 to -10 Nov. -5 to +7 Dec. -5 to +15
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Page 3 of 3
312.896.2001
Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be
reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for
informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates
may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.
--
John Christopher
Linn Group
312.896.2061
