Sean K. Treasure
Export sales were largely weak for most US grain and oil-seeds. All wheat export sales totaled a paltry 151 TMT including a big, fat -29.3 for the HRW. Hard Red Spring was the only class with a halfway decent showing at 123.6 TMT; frankly, if that’s our bright spot then wheat export demand is pretty bleak. Corn sales came in at 387.6 TMT, mostly bound for Mexico. Were it not for soybeans, elevators at US deep water ports would be shut down; Bean sales came in at a robust 910,600 MT. This brings up an interesting question regarding the soybean balance sheet. At this point, total soybean export sales for the 2014/2015 marketing year are at 1,586,940,000 bushels. The December WASDE had total exports pegged at 1,760,000,000. That leaves only 173,060,000 bushels or, just under 4710 TMT. I realize that the window is short; South American harvest is just around the corner but there is good reason to think that we will sell more than 4710 TMT. So, the question then is, how much more? Monday’s WASDE report should address that to some extant but the cash market isn’t exactly bullish. The interesting revelation though will be the net effect on soybean carryout. Monday can’t come too soon in this case.
Grain futures pretty much did what one would expect them to do based on export demand; wheat was down, soybeans were up and corn didn’t change much. For the week nearby corn futures closed up 4 ½ cents and March soybeans finished up 49 cents. On the wheat side, Chicago March finished down 17 ½ cents, KC closed 16 ½ lower and Minneapolis March finished the week down 7 ¾ cents. Kansas City and Minneapolis closed only a few cents apart.
There are some minor revisions to domestic basis levels this week as traders pick up steam in the first full week of the year. Keep an eye on the hard wheats; knowing what we know about protein values in the spring wheat, you can bet that low pro DNS is being blended into HRW at a pretty good clip. It’s nearly impossible for even seasoned grain inspectors to distinguish between some varieties so anybody handling grain has a major incentive to get rid of as much of the cheap stuff as possible. By the time HRW makes its way to a foreign buyer, there’s a good chance they’ve got as much spring wheat as they do HRW. Markets have a way of sorting out price discrepancies.
Chicago Gulf PNW
Soybeans: Option H .78H .95H
Corn: Option H .57H .85H
SRW: +.30H 1.05H N/A
HRW: N/A 1.05H (12 Pro) .90H (11.5 Pro)
DNS: 1.00H N/A 2.50H (14 Pro)
SWW: N/A N/A 1.10H
On the global front, there were a few pieces of business floating around, most notably the Egyptian tender. Not surprisingly, the US failed to sell anything to Egypt; France won the day, full rundown of prices below:
· Egypt bought 180,000 MT of French wheat for Feb 8-18 shipment
· 60,000 MT from Lecureur at $248.94/MT fob and $12.50/MT freight
· 60,000 MT from Glencore at $250.25/MT fob and $14.50/MT freight
· 60,000 MT from Glencore at $250.25/MT fob and $14.50/MT freight
· Bangladesh bought 50,000 MT of optional origin wheat for LH Jan/FH Feb from Glencore at $279.75/MT delivered and 50,000 MT at $280.87/MT delivered.
· Bangladesh also agreed to purchase 250,000 MT of wheat from Ukraine at $297.50/MT delivered, in a government to government deal.
· South Korea's MFG is seeking up to 420,000 MT of worldwide corn for arrival between April and May
· Japan bought 122,770 MT of US wheat for Feb/March shipment including 60,370 MT of SWW and 62,400 MT of NS/DNS. HRW was left out this week which doesn’t bode well for the HRW on next week’s export sales report.
Please don’t hesitate to contact me with any questions or comments. [email protected]
Happy trading!
Sean K. Treasure
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.
Export sales were largely weak for most US grain and oil-seeds. All wheat export sales totaled a paltry 151 TMT including a big, fat -29.3 for the HRW. Hard Red Spring was the only class with a halfway decent showing at 123.6 TMT; frankly, if that’s our bright spot then wheat export demand is pretty bleak. Corn sales came in at 387.6 TMT, mostly bound for Mexico. Were it not for soybeans, elevators at US deep water ports would be shut down; Bean sales came in at a robust 910,600 MT. This brings up an interesting question regarding the soybean balance sheet. At this point, total soybean export sales for the 2014/2015 marketing year are at 1,586,940,000 bushels. The December WASDE had total exports pegged at 1,760,000,000. That leaves only 173,060,000 bushels or, just under 4710 TMT. I realize that the window is short; South American harvest is just around the corner but there is good reason to think that we will sell more than 4710 TMT. So, the question then is, how much more? Monday’s WASDE report should address that to some extant but the cash market isn’t exactly bullish. The interesting revelation though will be the net effect on soybean carryout. Monday can’t come too soon in this case.
Grain futures pretty much did what one would expect them to do based on export demand; wheat was down, soybeans were up and corn didn’t change much. For the week nearby corn futures closed up 4 ½ cents and March soybeans finished up 49 cents. On the wheat side, Chicago March finished down 17 ½ cents, KC closed 16 ½ lower and Minneapolis March finished the week down 7 ¾ cents. Kansas City and Minneapolis closed only a few cents apart.
There are some minor revisions to domestic basis levels this week as traders pick up steam in the first full week of the year. Keep an eye on the hard wheats; knowing what we know about protein values in the spring wheat, you can bet that low pro DNS is being blended into HRW at a pretty good clip. It’s nearly impossible for even seasoned grain inspectors to distinguish between some varieties so anybody handling grain has a major incentive to get rid of as much of the cheap stuff as possible. By the time HRW makes its way to a foreign buyer, there’s a good chance they’ve got as much spring wheat as they do HRW. Markets have a way of sorting out price discrepancies.
Chicago Gulf PNW
Soybeans: Option H .78H .95H
Corn: Option H .57H .85H
SRW: +.30H 1.05H N/A
HRW: N/A 1.05H (12 Pro) .90H (11.5 Pro)
DNS: 1.00H N/A 2.50H (14 Pro)
SWW: N/A N/A 1.10H
On the global front, there were a few pieces of business floating around, most notably the Egyptian tender. Not surprisingly, the US failed to sell anything to Egypt; France won the day, full rundown of prices below:
· Egypt bought 180,000 MT of French wheat for Feb 8-18 shipment
· 60,000 MT from Lecureur at $248.94/MT fob and $12.50/MT freight
· 60,000 MT from Glencore at $250.25/MT fob and $14.50/MT freight
· 60,000 MT from Glencore at $250.25/MT fob and $14.50/MT freight
· Bangladesh bought 50,000 MT of optional origin wheat for LH Jan/FH Feb from Glencore at $279.75/MT delivered and 50,000 MT at $280.87/MT delivered.
· Bangladesh also agreed to purchase 250,000 MT of wheat from Ukraine at $297.50/MT delivered, in a government to government deal.
· South Korea's MFG is seeking up to 420,000 MT of worldwide corn for arrival between April and May
· Japan bought 122,770 MT of US wheat for Feb/March shipment including 60,370 MT of SWW and 62,400 MT of NS/DNS. HRW was left out this week which doesn’t bode well for the HRW on next week’s export sales report.
Please don’t hesitate to contact me with any questions or comments. [email protected]
Happy trading!
Sean K. Treasure
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.
