Wheat Comment 10-16-09
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Wheat Morning Update & Commentary Wheat looks to have put in a top on Wednesday for the time being. A 10 to 15 cent break starts to look ugly on the weekly charts. Fundamentals remain bearish, with ample world supplies overhanging the market. Many investors feel the U.S. Dollar has done its job on commodities for the time being. Index fund re-balancing and increased government regulation also support a move lower in wheat. Tender activity has picked up this week as consumers sought coverage after the recent run up. Export Sales were in line at 480,200 mt vs. an expected 450k-600k mt as the move lower in the dollar was unable to spur excess activity in for U.S. exports. 23,000 mt of wheat was purchased on Friday by Taiwan flour miller group from Cargill, the tender deadline had been earlier this week on Wednesday. Egypt left the U.S. standing on the sidelines as they solidified a purchase of 180,000 mt of French wheat from various firms at 189.50 a tonne. Bangladesh, Algeria and Morocco all remain around the market. New currency strength in the Aussie may limit their competitiveness going forward. HRW basis is flat while freight remains firm. SRW Basis remains flat with a full pipeline overhanging the market. Wheat output in Argentina for the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires Grain Exchange. Overnight markets returned to normal volume with Chicago trading 1740 contracts in the DEC. Chicago closed up 2 1/2 cents. Kansas ...
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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
Wheat looks to have put in a top on Wednesday for the time being. A 10 to 15 cent break starts to look
ugly on the weekly charts. Fundamentals remain bearish, with ample world supplies overhanging the
market. Many investors feel the U.S. Dollar has done its job on commodities for the time being. Index
fund re-balancing and increased government regulation also support a move lower in wheat. Tender
activity has picked up this week as consumers sought coverage after the recent run up.
Export Sales
were in line at 480,200 mt vs. an expected 450k-600k mt as the move lower in the dollar was unable to
spur excess activity in for U.S. exports. 23,000 mt of wheat was purchased on Friday by Taiwan flour
miller group from Cargill, the tender deadline had been earlier this week on Wednesday. Egypt left the
U.S. standing on the sidelines as they solidified a purchase of 180,000 mt of French wheat from various
firms at 189.50 a tonne. Bangladesh, Algeria and Morocco all remain around the market.
New currency
strength in the Aussie may limit their competitiveness going forward. HRW basis is flat while freight
remains firm. SRW Basis remains flat with a full pipeline overhanging the market.
Wheat output in
Argentina for the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires Grain Exchange.
Overnight markets returned to normal volume with Chicago trading 1740 contracts in the DEC. Chicago
closed up 2 1/2 cents. Kansas City finished overnight trade up 3 3/4 cents and MPLS closed up 3 1/2
cents. Kansas City/Chicago spread is trading at 14 1/4 cents. The MPLS/Chicago spread is at 27 1/4
cents. Euronext (Matif) Milling Wheat continues to gain with a last trade at $5.08/bu USD in the Nov.
Globex Overnight
Contract
Last
Net Change
High
Low
Volume
ZWZ9
507^4
2^4
511^2
501^2
1740
ZWH10
526^4
2^6
530^0
520^2
194
ZWK10
540^0
3^4
540^0
532^4
132
ZWN10
550^2
2^6
552^0
544^4
88
KEZ9
521^6
3^6
522^4
513^4
428
KEH10
536^6
3^4
537^4
530^6
70
MWEZ9
534^6
3^4
537^0
526^0
176
MWEH10
550^0
3^4
550^0
542^2
17
Early Opening Calls: 1-2 cents better
Top News
**USDA Wheat 09/10 Export Sales Net: 480,200 mt; 10/11 Net: NONE mt; expected 450k-600k mt
-- 23,000 mt of Wheat purchase was announced on Friday by Taiwan flour miller group from Cargill,
the tender deadline had been earlier this week on Wednesday.
-- 2 cargos of US Wheat sought by flour mill group in Taiwan next week on Wednesday, Oct 21, acc. to
group official.
They're seeking the grain shipment from early Dec to early Jan. with total volume near
74,000 mt
http://www.linngroup.com
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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 purchases 180,000 mt of French Wheat: 60,000 mt of Wheat was sold by Toepfer to
Egypt's GASC for reported price of $189.50/mt; 60,000 mt was sold by Soufflet for $189.50/mt; 60,000
mt of Wheat was sold by Lecureur for $189.50/mt
-- 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 +0.25 euro better at 127.0 euros/mt.
-- Globex Wheat Vol. 51,956; Pit Vol. 2,151; Open Interest Change: - 375
-- Weather: 6-10 day Forecast: Normal to Below Temps. Above Normal Precip
-- Outside markets: Energy Complex -0.14 at $77.44; Gold & Silver: -4.3 at $1046.3 & -0.176 at
$17.270; US $ +0.340 at $76.000
Cash Markets
-- CIF SR Wheat steady off 5. Oct. -25 to -?? Nov. -10 to +10 Dec. -10 to +15
--
John Christopher
Linn Group
312.896.2061
