Outside Markets as of 1:30: Dollar Index up 0.082 at 82.911;
NYMEX-WTI up $1.32 at $96.17; Brent Crude up $0.72 at $108.88; Heating Oil up
$0.0003 at $2.8775; Livestock were mixed with cattle down and hogs up; Gold
down $7.70 at $1596.80; Copper up $0.0090 at $3.4540; Silver down $0.095 at
$28.72; S&P’s up 8.00 at 1555.00, Dow futures are up 82.00 at 14,467.00 and
Treasuries are a tad firmer.
Shaky economic data today to bring the focus back on the US
instead of Cyprus and Europe. The headline number for Durable goods
orders was better than expected up 5.7% vs. the forecast of 3.9%, but much of
the gain was due to in large part to a 95.3% m/m rebound in commercial aircraft
orders, reversing a 24% slump in January. Ex transportation, durable
goods orders actually fell by 0.5% m/m. Consumer confidence dipped
sharply to 59.7 in march from 68.0, and could be a delayed reaction to the
rally in gasoline prices during most of the survey period. Gasoline
prices are on their way back down, however.
Grains
Mixed day with a nice rally at the close for beans and
wheat. Hard to separate pre-report positioning and genuine price action
given the proximity to the March reports. The features today were
definitely the cold weather overnight in the southern plains, chatter about
Brazilian soybean sales rolling back up to the US (limited), margin induced
corn selling and talk of more Argentine maize trading into the US-SE. I
sent around maps of the cold temps overnight as well as the progress of the HRW
crop earlier, so I will assume that subject has been well discussed.
Believe that is the cause behind the late rally led by HRW. Still very
split opinions out there on what amount of damage the cold is actually doing at
this juncture.
Chatter this morning about some limited soybean business
rolling back up to the US this week. Given the fact the vessel lineups
keep building in Brazil (see below), not too surprising. Argentina has
cheaper beans than the US, but Argentina is only 5-10% harvested and won’t have
supplies in a shippable position until mid-April. At 223 vessels and
13.169MMT, lineups are still easily an all-time record. Caution thinking
basis is going to get supercharged at the PNW and Gulf, however, as exporters
are only going to pay what is absolutely necessary to get the current boat
covered. Few are willing to be short a ton of bean basis given the well
discussed supply tightness in both the upper-Midwest and corn belt.
Either way, will put Thursday’s March 1 Stocks even more in focus. The SK/SN
price action certainly fits with more business being done as it rallied 1.50c
to +21.25c today on good volume.
I sent around the margin increase information earlier this
morning. Margins were increased for new crop corn, new crop corn spreads
and old/new crop spreads. Could be part of the reason for the July led
pressure this week as well as the CN/CZ correction we’ve seen. In
addition, plenty more chatter in the trade about Argentina approving additional
export licenses on corn following the 2MMT of licenses approved last
week. A couple implications: 1) likely have more confidence their corn
crop is above 25MMT. 2) raises odds for more Argy maize to trade into the
US. There was talk a handymax or panamax vessel, 40-60,000MT, traded into
US-SE last week. Talk of more trading in today. Argy FOB basis
levels are said to be around -45/-50K for May delivery which is a $269/MT FOB
price. Using panamax freight of $27/MT or handymax freight of $36/MT,
would lay into Brunswick/Wilmington/Mobile somewhere between $296-$305/MT
C&F. This would be somewhere around +21/44K vs. US-CIF bids at
+52/56K for May. Despite this, CK/CN rallied +0.75c to +18.75c which
certainly runs contrary to the aforementioned. Tonnages may not be enough
at this point to tank the US market, but should mean our export business
remains subdued at the very least. Cheap barge freight and May close to
delivery equivalence is probably limiting the amount of imports some are
willing to extend at this point.
And while somewhat of a tangent, worth noting the chart
below which shows the aggregate gross commercial long position (end users) of
Live Cattle, Feeder Cattle and Lean Hogs which is at a new all-time record high
going back to 1/3/2006. Compare this with the aggregate net spec position
which is near the lowest levels since October 2009. While specs have been
right up this point, the people who actually use the meat are toting record
long positions while the people who buy and sell paper are net short this
market. Anytime you get such a sharp divergence between these two groups,
I think bears watching.
Brazil Daily Soy Shipments From Major Ports: Summary
(Table)
2013-03-26 17:36:03.38 GMT
By Daniel Grillo
March 26 (Bloomberg) --
Following is a table detailing scheduled soybean
shipments for vessels berthed, arrived or expected at
major ports in Brazil,
according to SA Commodities in Santos, Brazil:
*T
=============================================================================
March 26 March
25 March 22 March 21 March 20 March 19
2013 2013
2013 2013
2013 2013
=============================================================================
-------------------------# of Ships------------------------
Soy
total
223 209
212 207
206 201
Soybeans
175 167
171 165
165 165
Soy
meal pellets
32
29
29
28 28
27
Soybean
meal
16
13
12
14
13 9
Soybean
oil
0
0 0
0
0 0
---------------------Metric Tons (000’s)-------------------
Soybeans
10,699.9 10,194.3 10,421.3 10,071.4 10,025.2
10,042.8
Soy
meal pellets 17,184.6 15,729.6 15,729.6 15,329.6
15,329.6 14,869.6
Soybean
meal
750.7 644.9
559.5 782.6
722.6 500.7
=============================================================================
March 26 March 25 March 22
March 21 March 20 March 19
2013 2013
2013 2013
2013 2013
=============================================================================
Soybean
oil
0.0 0.0
0.0 0.0
0.0 0.0
Oklahoma
Freeze Threatening Crop Damage to Wheat Hurt by Drought
2013-03-26
15:10:55.920 GMT
By Tony C. Dreibus
March 26 (Bloomberg) -- Freezing
weather in Oklahoma may
have damaged wheat plants that already were hurt by the
worst
drought since the 1930s.
Temperatures overnight dropped
to 15 degrees Fahrenheit
(minus 9 Celsius) near Guymon, in the Oklahoma panhandle,
National Weather Service data show. The freeze may have
hurt
wheat tillers, which are stems that emerge from the root
of the
plant and produce grain, Telvent DTN said in a report.
Plants were susceptible to
damage because there was little
or no snow cover to protect against freezing weather,
said
Darrell Holaday, the president of Advanced Market
Concepts.
“They had moisture a month ago,
but the last two or three
weeks, it’s been dry,” Holaday said by telephone from
Wamego,
Kansas. “And their crops were further along. I think you
probably had some damage.”
Growers of hard-red winter
wheat, used to make bread and
grown mostly in the southern Great Plains, may leave
almost 24
percent of their crop unharvested this year because of
the
drought, Futures International LLC said in an e-mail
yesterday.
Farmers seeded 29.1 million acres with hard-red winter
varieties
from September through November, Department of
Agriculture data
show. Oklahoma is the second-biggest grower behind
Kansas.
About 26 percent of the crop in
Oklahoma was in good or
excellent condition as of March 24, up from 24 percent a
week
earlier, according to the USDA. In Kansas, 29 percent of
plants
earned top ratings, unchanged from a week earlier, the
government said in a report yesterday.
Sequestration
begins to Bite US Agriculture
2013-03-26
14:28:23.86 GMT
The $85 billion in federal budget cuts to federal
spending that began on March
1, 2013, better known as the sequester, promises to reach
broadly and deeply
into agriculture spending, all the way to the cotton
farm. After already
announcing plans to suspend several reports due to
sequestration cuts, the USDA
is going one step further, announcing a series of steep
cuts in direct payments
to US farmers across a range of commodities. The
USDA Farm Service Agency (FSA)
recently notified Congress of its intention to capture
the required sequester
savings by reducing payments made through the direct
payment program account by
up to 8.5%. The agency said the exact final
percentage reduction in direct
payments won't be known until closer to the end of the
current fiscal year on
Sept. 30th, since direct payments are to be made in
October. Already, groups
representing US cotton, rice, and wheat producers have
been notified of the
looming cuts. The Department advised Congress of
the plan and will wait 30 days
(until April 20) before implementing the reductions.
Tregg Cronin
Market Analyst
800-328-6530
651-355-6538
651-355-3723 fax
Market Analyst
800-328-6530
651-355-6538
651-355-3723 fax
CHS Hedging, Inc.
The Right Decisions for the Right Reasons
The Right Decisions for the Right Reasons
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