Information about grain markets and info to help producers to market crops. See how various grain marketing strategies can effect ones average price. We will be posting various potential trade and option strategies along with marketing decisions made on our mock farms.
Tuesday, December 18, 2012
Overnight Highlights from one of our speakers for this week (Tregg Cronin of CHS Hedging)
Below is a forward from one of
our speakers (Tregg Cronin of CHS Hedging) for our meetings this week.
We would like to
invite you to our
2012 – 1:00 pm MST at the
in Philip, Tregg Cronin Speaker
Dec. 20, 2012 –
10:00 am CST at the Ramkota in
Pierre, Kevin Van
Trump and Tregg Cronin will be speaking on the grain markets. Lunch will
This communication may contain privileged and/or confidential
information and is intended only for the use of the individual or entity to
which it is addressed. If the reader of this message is not the
intended recipient, you are hereby notified that any unauthorized
dissemination, distribution, and/or use of this communication is strictly
prohibited. This communication makes no representation or warranty
regarding the correctness of any information contained herein, or the
appropriateness of any transaction for any person. Nothing herein shall
be construed as a recommendation to buy or sell any commodity contract.
There is a risk of loss when trading commodity futures or options.
From: Cronin, Tregg Sent: Tuesday, December 18, 2012 7:19 AM Subject: Overnight Highlights
Outside Markets: Dollar Index
down 0.097 at 79.486; NYMEX-WTI up $0.61 at $87.81; Brent Crude up $0.71 at
$108.33; Heating Oil up $0.0230 at $2.9793; Livestock markets are all firmer;
Gold up $2.20 at $1700.40; Copper down $0.0050 at $3.6610; Silver up $0.225 at
$32.500; S&P futures are up 4.25 at 1431.00, Dow futures are up 37.00 at
13,221.00 and Treasuries are softer.
Every head line on every financial
media outlet has “markets rally on hopes of budget compromise,” so I think that
about covers it. The compromise involves tax rates increasing for
individuals making over $400,000/yr, and in exchange Boehner and the
Republicans get $1.2 trillion in revenue increases and spending cuts. The
spending cuts do include entitlements tied to Social Security, but not
Medicare. Markets obviously liked it yesterday and appear to like it this
morning. The IBEX-35 is up 0.78% and the NIKKEI closed up another 0.96%
on prospects for more monetary stimulus by the BOJ. Sanderson Farms
reported earnings this morning of $0.41/share vs. estimates for $0.32 and -$5.74
LY, becoming the latest meat packer to post better than expected
earnings. Thank you SA corn.
the last 24 hours was concentrated in the ECB and East Coast, while the Midwest
was largely quiet. There are scattered systems moving across the upper-Midwest
this morning bringing light snow. The next 1-3 days will see additional
moisture hit the central and eastern corn belt with the heaviest totals around
the Great Lakes region to the tune of 1.72”. IA should also see decent
totals, the majority of which should fall as snow. Omaha, NE could see as
much as 7”. NOAA’s extended maps have turned much more generous, painting
above normal precip across the majority of the Midwest during the 6-10 &
8-14, and is even pushing it as far south as TX, part of the reason behind the
pressure in HRW. Temps will be normal/below. “The forecast
sees a front to bring rains of .50-1", isolated to 1"+ to the
Argentine growing regions today and tomorrow and then things to be fairly quiet
for the rest of the week, with some more rains possible by Sunday and Monday of
next week. Early estimates on totals early next week are in the .35-.85"
range, with some isolated heavier totals.” – John Dee.
Weaker overnight led by the soy
complex after trade failed to post a close above $15.00 which likely incited
some technical selling. Little on the newswires to help with direction,
and that could be the problem: US grains still aren’t competitive into a lot of
the swing destinations we need to be in order to justify current corn and wheat
export forecasts. That could be changing, however, as chatter this
morning suggests US wheat is pricing itself into Brazil as Argentine supplies
wither and quality becomes a problem on what supplies were harvested. This
after rumors Argentina may cuts its export quota on wheat to 3.37MMT from
4.5MMT. The USDA is currently using 5.5MMT of exports. Most
analysts are counting on Brazil taking US wheat, so this wouldn’t be a complete
surprise, just maybe more tonnage than originally anticipated. Argy
FOB offers on wheat this morning for Jan/Feb shipment are said to be around
$370/MT compared with US-SRW at $321.47/MT and US-HRW at $354/MT.
Canadian wheat to Brazil has also been tossed around.
Japan is back in the mix looking
for 121,026MT from the US and Canada with the majority US-origin. These
would be for shipment from Jan 16 to Feb 15 and arrival by March 31.
Other headlines included Russia’s grain stockpiles as of Dec totaling 29.7MMT,
down 30% from 42.3MMT a year earlier. The figure includes large producers
who held stocks of 16.8MMT, down from 25.3MMT a year ago. These figures
don’t include small, private farms or household reserves. YTD exports
from Russia totaled 12.4MMT, down from 15.6MMT a year ago. Palm Oil stocks
in China could reach 1MMT in the near futures said a state government
website. Inventories last week were 890,000MT, up 50,000MT from a week
earlier. Little improvement is seen in demand as everyone wants meal
Open interest changes yesterday
included wheat down 500, corn down 4,500 contracts, soybeans up 5,610, meal up
2,680 and soy oil up 2,430. More spec liquidation in corn while funds
were probably adding length yesterday which is now underwater. Chinese
markets were mixed with beans up 8.25c, meal down $4.30, soyoil up 9c, corn
unchanged, palm down 7c and wheat up 4.25c. Malaysian Palm Oil was down 8
ringgit at 2,342. Paris Milling Wheat is down 0.58%, Rapeseed down 1.13%,
Corn down 1.11%, UK Feed Wheat down 0.92%, and Canola down 0.64%. Also
worth mentioning several private estimates flying around the trade about rising
Brazilian soybean production. Have seen several 81’s and 82’s and some
larger. Cordonnier unchanged at 80MMT but sees it larger if weather holds.
Call things weaker today as
European prices dump, South American weather remains mostly beneficial in
Brazil and is moderating in Argentina, demand for US grains remains slow and
the light volume of this holiday trade allows prices to move pretty freely.
Longer-term, the sleeper in corn could be the feed/residual and harvested
acres, but in the near-term, weekly data sets by ethanol and exports will keep
the bias negative. Wheat needs business bad. Period. Soybeans
will struggle if grains can’t firm.
This material has been
prepared by a sales or trading employee or agent of CHS Hedging, Inc. and
should be considered a solicitation. This communication
may contain privileged and/or confidential information and is intended only for
the use of the individual or entity to which it is addressed. If the
reader of this message is not the intended recipient, you are hereby notified
that any unauthorized dissemination, distribution, and/or use of this
communication is strictly prohibited. CHS Hedging, Inc. makes no
representation or warranty regarding the correctness of any information contained
herein, or the appropriateness of any transaction for any person. There
is a risk of loss when trading commodity futures and options.