The US dollar index nosedived this week posting its biggest weekly drop against the Euro in more than three years. This, in and of itself is the main explanation for the weekly pop in wheat futures. Going forward will be interesting. Demand for US grain and oilseeds is piss poor, clearly the market is focused on other factors, i.e. the value of the dollar. So, continued weakness in US exchange rates ought to be outright bullish grain futures.
Export sales were disappointing across the board…of course with the exception of sorghum. All wheat sales weren’t bad at 391,900MT for the current marketing year and 142,900 for next year. Corn and beans were awful, totaling only 567,100MT for both marketing years for corn and 347,000 in the beans. Sorghum sales are nipping at corns heels, with sales totals of 348,100 for both marketing years. Domestically, use is steady with ethanol production at 947,000bpd indicating that the culprit may be…the dollar.
Basis levels were largely stagnant across the country with the exception of the PNW. SWW bids are down 30 cents over the last two weeks and HRW is off a dime. SWW trade is always dicey but it becomes particularly difficult as the year progresses. With limited outlets for export, traders don’t want to get stuck with the turd in their pocket and carry expensive grain in a depreciating market. Trading this stuff is a thankless job… DNS is still well bid, particularly for high quality/high protein. 14.5’s on the spot floor were up 20 cents today at 200K. 15’s are bid at 275K into Minneapolis. Nearby bids are as follows:
Chicago Gulf PNW
Soybeans Option K .75 K 1.10 K
Corn: .15 K .60 K 1.15 K
SRW: .10 K .90 K N/A
HRW: N/A .80 K (12 pro) 1.20 K (11.5 pro)
DNS 14 pro: 1.50 K N/A 3.00 K
SWW: N/A N/A 1.60 K
The BDI finished higher once again, closing the week at 591 points. I won’t add anything further to my previous weeks comments other than to say, though the short term trend is higher, it’s still trading at historically very low levels. Ocean freight is relatively cheap.
I read a Reuters brief this week that was mostly routine. In the weekly Chinese domestic auction, the government sold US and Australian wheat. Interestingly however, the article mentioned that the Aussie wheat was from the 2010 crop year. It reminded me of a time a number of years ago when I attended a meeting with a Chinese trade delegation in Portland. Their chief concern was the storability of our wheat. It seemed like a strange question at the time but clearly China likes to store grain in large quantities. Still, wheat from the 2010 crop year was some expensive stuff…
International grain tenders this week:
· Japan bought US and Canadian food wheat this week for Apr 21-May 20 shipment. The total included:
· 20,293 MT of US Western white
· 25,015 MT of US HRW
· 22,203 MT of US NS/DNS
· 30,746 MT of Canadian Western Red Spring
· The CCC announced a tender for 51,710 MT of Sorghum for Apr 17-27 shipment for Sudan.
· Syria announced a tender to buy 150,000 MT of soft wheat. Shipment is negotiable.
· NOFI (S. Korea) announced a tender to buy 55,000 MT of soybean meal for September arrival.
· KOCOPIA (S. Korea) bought 54,000 MT of optional origin corn for arrival by FH Jul.
· KFA (S. Korea) announced a tender for 50-65,000 MT of optional origin corn for July arrival.
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 disappointing across the board…of course with the exception of sorghum. All wheat sales weren’t bad at 391,900MT for the current marketing year and 142,900 for next year. Corn and beans were awful, totaling only 567,100MT for both marketing years for corn and 347,000 in the beans. Sorghum sales are nipping at corns heels, with sales totals of 348,100 for both marketing years. Domestically, use is steady with ethanol production at 947,000bpd indicating that the culprit may be…the dollar.
Basis levels were largely stagnant across the country with the exception of the PNW. SWW bids are down 30 cents over the last two weeks and HRW is off a dime. SWW trade is always dicey but it becomes particularly difficult as the year progresses. With limited outlets for export, traders don’t want to get stuck with the turd in their pocket and carry expensive grain in a depreciating market. Trading this stuff is a thankless job… DNS is still well bid, particularly for high quality/high protein. 14.5’s on the spot floor were up 20 cents today at 200K. 15’s are bid at 275K into Minneapolis. Nearby bids are as follows:
Chicago Gulf PNW
Soybeans Option K .75 K 1.10 K
Corn: .15 K .60 K 1.15 K
SRW: .10 K .90 K N/A
HRW: N/A .80 K (12 pro) 1.20 K (11.5 pro)
DNS 14 pro: 1.50 K N/A 3.00 K
SWW: N/A N/A 1.60 K
The BDI finished higher once again, closing the week at 591 points. I won’t add anything further to my previous weeks comments other than to say, though the short term trend is higher, it’s still trading at historically very low levels. Ocean freight is relatively cheap.
I read a Reuters brief this week that was mostly routine. In the weekly Chinese domestic auction, the government sold US and Australian wheat. Interestingly however, the article mentioned that the Aussie wheat was from the 2010 crop year. It reminded me of a time a number of years ago when I attended a meeting with a Chinese trade delegation in Portland. Their chief concern was the storability of our wheat. It seemed like a strange question at the time but clearly China likes to store grain in large quantities. Still, wheat from the 2010 crop year was some expensive stuff…
International grain tenders this week:
· Japan bought US and Canadian food wheat this week for Apr 21-May 20 shipment. The total included:
· 20,293 MT of US Western white
· 25,015 MT of US HRW
· 22,203 MT of US NS/DNS
· 30,746 MT of Canadian Western Red Spring
· The CCC announced a tender for 51,710 MT of Sorghum for Apr 17-27 shipment for Sudan.
· Syria announced a tender to buy 150,000 MT of soft wheat. Shipment is negotiable.
· NOFI (S. Korea) announced a tender to buy 55,000 MT of soybean meal for September arrival.
· KOCOPIA (S. Korea) bought 54,000 MT of optional origin corn for arrival by FH Jul.
· KFA (S. Korea) announced a tender for 50-65,000 MT of optional origin corn for July arrival.
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.
