Sean K. Treasure
US equities markets rose for the second straight week buoyed by positive economic data and somewhat accommodative language coming from the Fed. For the week, the Dow is up 1.5 percent, the S&P 500 is up 0.9 percent and the Nasdaq is up 0.8 percent. Trading volume has been light however and will likely stay that way until after the first of the year. Overseas, the Nikkei closed up .1% today with Europe, Canada, Latin America and a number of other Asian markets were closed for a holiday the day after Christmas.
Not many fireworks in grain and oilseed futures either other than long liquidation in the wheat pits. Corn seems to have found support as we are now competitively priced into many international markets. Our biggest concern continues to be soybeans. We believe there is still downside risk here and caution initiating any new long positions. For the week, March Corn closed 4 ¼ cents higher and January Soybeans finished up 17 cents. In the wheat pits, Chicago March closed down 21 ½ cents, KC finished down 21 ¾ cents and Minneapolis closed down 16 ¾ cents.
Not a lot of grain changing hands this week in domestic cash markets. Last week there was generally a rapid decline in premiums across the grain and oilseed spectrum. This week however, basis levels have largely remained unchanged with buyers not seeing any urgency to push bids and shippers not feeling any pressure from a farmer who’s largely disengaged from the market. It seems that traders are just keeping their heads down to finish the year out. Week ending bids are below.
Chicago Gulf PNW
Soybeans: +.05F .89F 1.00F
Corn: -.06H .51H .85H
SRW: +.35H 1.10H N/A
HRW: N/A .90H (12 Pro) .95H (11.5 Pro
DNS: .75H N/A 2.50H (14 Pro)
SWW: N/A N/A .78H
On the international front, we did have a fair amount of activity for the week:
· Egypt’s GASC bought 240,000 MT of French wheat and 60,000 MT of Russian wheat with prices ranging from $258.69 to $264/MT FOB. This is significant because the Russian’s still participated and sold albeit on a limited basis. Later, the Russian Grain Union head said that Russia may default on January shipments to Egypt; GASC officials responded that the Russians need to honor their contracts. Don’t expect a default however; Egypt is a huge customer for the Russian’s.
· Romanian wheat was the lowest offer in Iraq’s tender for 50,000 MT of hard wheat at $313/ton C&F.
· Pakistani buyers bought 50,000 MT of beans from the US for Feb 2015 shipment. Potentially a sign of a move away from canola and soy meal imports.
· Bangladesh bought 50,000 MT of wheat from Glencore at $270.00/MT. Probably Ukrainian origin.
· Taiwan (TFMA) bought 78,320 MT of HRW/DNS/SWW from the US for Feb/March 2015 out of the PNW.
· S Korea reissued tender for 100,000 MT of non GMO beans for 2016
· Down in South America, port workers at Rosario in Argentina had a one day strike before reaching an agreement with shippers and returned to work on Saturday. It seems there is always some sort of labor shutdown at some South American port so this doesn’t seem like big news. But, since they are our biggest export competitor for row crops it’s important to monitor.
The export sales report has been delayed until Monday, we assume that means the same schedule for next week’s report as well.
We here at Bushel hope you enjoy a safe and prosperous new year. If you have any questions, don’t hesitate to contact me at [email protected]
Happy trading!
Disclaimer: Commodity trading involves substantial risk and may not be suitable for everyone. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this wire and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.
