Wheat Comment 10-19-09
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Wheat Morning Update & Commentary Wheat closed lower on Friday, but was unable to erase all of the positive gains from the week. Weekly charts have a positive tone, and harvest concerns for soybeans and corn could aid in producing short-covering rallies. U.S. wheat despite the decline in the Dollar is still not as competitive as Black Sea origin; however top Ukrainian private analyst, UkrAgro said domestic prices and competition from other exporting countries are likely to slow down the pace of grain exports from the region. Turkey's state grain agency sold 50,000 mt of wheat. White milling wheat was priced at $163 a tonne FOB and the Red Milling Wheat was 135.25 a tonne FOB. Bangladesh also issued a new tender for 100,000 mt of what for LH DEC FH Nov delivery. French wheat, which had been quarantined by the Egyptian Government, was released, and obviously wasn't much of a concern, as Egypt bought 180,000 mt of additional French origin last week at $189.50/ton. HRW basis is flat while freight remains firm. SRW Basis remains flat with a full pipeline overhanging the market. The prospect of a better-than-expected Australian wheat crop appears to have faded after extreme weather in grain-growing regions over the weekend. Grains analysts said frosts in the east of the country and a heat-wave in the west could make it difficult to see the 2009/10 harvest hit the top range of forecasts. Overnight markets had a somewhat subdued Sunday evening with Chicago ...
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Page 1 of 2
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 closed lower on Friday, but was unable to erase all of the positive gains from the week. Weekly
charts have a positive tone, and harvest concerns for soybeans and corn could aid in producing short-
covering rallies. U.S. wheat despite the decline in the Dollar is still not as competitive as Black Sea
origin; however top Ukrainian private analyst, UkrAgro said domestic prices and competition from other
exporting countries are likely to slow down the pace of grain exports from the region. Turkey's state
grain agency sold 50,000 mt of wheat. White milling wheat was priced at $163 a tonne FOB and the Red
Milling Wheat was 135.25 a tonne FOB. Bangladesh also issued a new tender for 100,000 mt of what
for LH DEC FH Nov delivery. French wheat, which had been quarantined by the Egyptian Government,
was released, and obviously wasn't much of a concern, as Egypt bought 180,000 mt of additional French
origin last week at $189.50/ton.
HRW basis is flat while freight remains firm. SRW Basis remains flat
with a full pipeline overhanging the market.
The prospect of a better-than-expected Australian wheat
crop appears to have faded after extreme weather in grain-growing regions over the weekend. Grains
analysts said frosts in the east of the country and a heat-wave in the west could make it difficult to see
the 2009/10 harvest hit the top range of forecasts.
Overnight markets had a somewhat subdued Sunday evening with Chicago closing up 7 3/4 cents on
2264 contracts. Kansas City finished overnight trade up 8 1/4 cents and MPLS closed up 7 cents. Kansas
City/Chicago spread is trading at 12 1/4 cents. The MPLS/Chicago spread is at 27 cents. Euronext
(Matif) Milling Wheat continues to gain with a last trade at $5.16/bu USD in the Nov.
Globex Overnight
Contract
Last
Net Change
High
Low
Volume
ZWZ9
506^4
7^6
507^6
495^6
2264
ZWH10
525^4
7^6
526^4
515^2
188
ZWK10
535^2
5^2
535^2
533^0
24
ZWN10
548^6
8^4
549^0
538^4
88
KEZ9
518^6
8^2
519^6
508^2
367
KEH10
534^0
8^2
535^0
525^6
79
MWEZ9
533^4
7^0
535^0
522^6
88
MWEH10
549^2
6^4
549^2
549^0
3
Early Opening Calls: 4-6 cents better
Top News
-- A new 100,000 mt of Wheat tender for Dec 2nd was issued by Bangladesh state run grainary, acc. to
traders
-- 50,000 mt of milling Wheat was sold in Turkey's tender that closed on Thursday, they also sold
25,000 mt of Durum Wheat, acc. to traders
-- 63,000 mt of French Wheat were released from quarantine after sitting in dock since Sept. by Egypt's
http://www.linngroup.com
Page 2 of 2
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.
ag ministry, acc. to top agency official
-- In the first 7 months of 2009, Soft Wheat imports into Italy were 2.295 mln mt up from the same
period a year ago when they were 1.95 mln mt, acc. to country's ANACER
-- In the first 7 months of 2009, Durum Wheat imports into Italy totaled 1.277 mln mt up from the same
period a year ago when they were 1.00 mln mt, acc. to country's ANACER
-- A large Russian grain exporting firm suggests the country needs to invest over $3 bln in its grain
exporting infrastructure if it wants to increase its export handling capability by 2015 to 40 mln mt/yr
-- Ukraine's Ag Ministry reported 92% of the country's crop was harvested with 42.3 mln mt of grain
brought in as of Oct 16th
-- Domestic prices & competition from other exporting countries are likely to slow down the pace of
grain exports from the Ukraine, acc. to local private crop analyst UkrAgro
-- Minnesota hogs are being tested by USDA for H1N1 virus, the samples were collected between Aug
26 to Sep 1 on samples collected at the state's fair.
They down play link between outbreak in children
and the hogs
-- Friday's USDA Cattle On Feed Oct 1: 101%; expected 100%; prior month 99%
-- Friday's USDA Cattle Placements during Sep: 105%; expected 105%; prior month 102%
-- Friday's USDA Cattle Marketings during Sep: 96%; expected 98%; prior month 96%
-- Saskatchewan Potash places N Amer stockpiles at slightly above 3.0 mln mt.
They say its the third
monthly fall, but still far above the long term average stockpiles for this time of year
-- 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 +1.25 euro better at 127.75 euros/mt.
-- Globex Wheat Vol. 32,317; Pit Vol. 1,165; Open Interest Change: - 601
-- Weather: 6-10 day Forecast: Below Normal Temps. Normal to Above Precip.
-- Outside markets: Energy Complex +0.08 at $79.10; Gold & Silver: +3.0 at $1054.5 & +0.045 at
$17.465; US $ -0.100 at $75.670
Cash Markets
-- CIF SR Wheat steady: Oct. -25 to -?? Nov. -10 to +10 Dec. -10 to +15
--
John Christopher
Linn Group
312.896.2061
