USDA report recap from CHS Hedging's Chris Steinhoff

Below is from CHS Hedging's Chris Steinhoff

Good Recap on current fundamental outlook.

Daily Summary from CHS Hedging's Chris Steinhoff

DJIA is up 80 points…gold is up $40.00+ and silver is $1.50 better…US$ index was 0.317 weaker…

 

Corn===firm with strength in the CK and CN leading the way as the market sees technical bounce follow thru from yesterday’s rebound of the new lows for the move

                === Buenos Aires Cereals exchange trimmed its corn production forecast to 24.8mmt from 25mmt last week

                ===they also say harvest is 35% complete in Argy

                ===IGC raises their estimate for world production

                ===weather forecasts still show a chance of rain 5-6 days out, inspiring some concern about delayed planting again as me get ready to close out the month of April

                                And we will have to plant the majority of the US corn crop in May this year

                ===CK/CN was non eventful today, settling at a 20 ¾ inverse, ½ weaker…N/Z closed at a  93 ¾ inverse…Z/H was a 10 ¾ carry

                ===CIF was down 1 to 2 cents on the nearby, Chicago processors were down 1. Most ethanol plants were steady to firm

                ===Flooding still a concern along the Miss and ILL river systems

                ===export sales were 12.4mb, slightly behind the 11.9mb needed weekly

===USDA announced 300tmt new crop corn to China and 240tmt to unknown… buying a discounted time slot vs the nearby makes sense

 

Beans===double digit gains as spec buying took the lead today as soymeal sales remain incredibly robust

                ===soymeal sales of 193.3tmt compares to a negative 3.9tmt needed weekly to hit the current USDA target

                ===Crushers crush beans to support the export program…USDA says imports of meal will be 350tmt, 136 more than a year ago

                ===CIF beans were back up 5 to 10 cents today…. many crushers saw bids firm 5 to 15 cents with many bids approaching +100           

                ===movement remains slow

                ===SN posted the highest close since Monday this week as yesterday’s low held support

===SX settled above $12.00 after a few days below…

 

Wheat===KCBT leads the way…Frost, drought are lead stories, and what will the tour find next week???

                ===the damage and production losses across the southern plains is known but indefinite in severity

                ===HRW has a stocks to use of 36% which will help allow the HRW market to withstand a minor issue

                ===There was wheat moving, or at least being priced from the farmgate today. mainly old crop but there was scattered old and new HRW

                ===$8.00 appears to be the magic cash number in areas of ND and MT

                ===keeping hearing fertilizer and seeding occurring in W ND, WSD and parts of MT

                ===KC spreads firmed again today with the KWK/N finishing at a 2 ¼ inverse

                ==MGEx and CME spreads settled weaker..MWK/N at a 15 inverse, CME K/N at a 2 ½ carry…

 

           

 

 

Christopher Steinhoff
Market Analyst
800-328-6530
651-355-6558
651-355-3723 fax

www.chshedging.com

 

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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.

Daily Summary from CHS Hedging's Chris Steinhoff

Crude oil was mixed and choppy early before firming later in session…DJIA is lower as N Korea threatens war, US companies report earnings etc etc…Grain get back to the 1:15pm CST close in Chicago and KC and 1:30pm CST in Mpls…looks like Chicago forgot to change when they post settlemetns

Corn===front end buying led the strength and also firmed spreads..CK was up 4-5,   CZ was down 3,  K/N settled at a 15 inverse

                ===RIN values were up, leading some to believe that helped the front month corn contracts

                ===volumes were modest as traders try to square positions ahead of Wednesday report after liquidating longs last week

                ===average trade guess on carryout is 812-824, depending on the survey…Some unusually low estimates: lanworth is 632, GCA is 625, Macquarie is 686 and a few more around 700mb skew the                       average to lower!!!

                ===bird flu in China still sees headlines as it sounds like a 7^th person dies

                ===seems like options volume picked up from large traders, possibly in anticipation of the USDA report

                ===export inspections of 10.1mb is well below the 17+/-mb needed weekly…is there any evidence the USDA will change exports?

                ===hearing a barge tries to get through lake pepin on the Miss River. It could lead to the open of the upper Miss River system…fertilizer north?

                ===CME plans to introduce an ethanol RIN contract by the end of May

                ===Some corn fields have seen some planting while other fields are ready..awaiting warmer temps, insurance and forecasted rains

                ===CIF  was up 1 to 2…processors were mostly unchanged  but looking for June forward

Beans===double digit gains led by SK as SK was up 15 cents… SX struggled to stay positive but last tick was up 4 cents

                ===possible short covering was seen as traders position themselves ahead of the USDA report on Wednesday

                ===Will USDA raise carryout like many expect? 50/50 chance

===bird flu in China causes worry about Chinese soy and meal demand as reports of killing birds circulate..Pigeons now seem to have the strain…but the problem doesn’t seem as bad as thot

last week

                ===export inspections of 15.3 was nearly triple the weekly needed amount as US exports remain stronger than needed

                ===S America harvest expands as Brazil is on the last 25% of harvest. Logistics remain back logged but they seem to be getting by

                ===China has been, almost unusually quiet in the export front, as they work thru the arriving boats

                ===K/N was firmer at a 19+ inverse as movement is quite slow and demand stays steady

                ===CIF was steady to a nickel better..processors were mostly steady to slightly better with quick ship bids

Wheat===double digit gains, led by HRW on nervousness about recent frost damage to the OK crop

                ===Meanwhile wheat looks pretty good in parts of KS and MT..(see link to article below)

                ===China pretty much admits they bought up to 1mmt of US wheat last week…it has not been reported through the daily announcement system, so inspections will need to be watched later

this summer

                ===KC was up 19  , CME was up  12 and MGEx was 12 ¼ higher

                ===KC spot was 2 to 5 lower for the 11.60 to 12.20 pro

                ===MGEx 14 spot is 90 to 107…seems like farmer has moved the low pro spring wheat and is sitting on a fair amount of higher pro

                ===export inspections were 27.2mb, above the 22.5mb needed weekly as we enter the last 60 days of the wheat marketing year

http://www.hutchnews.com/Todaystop/Sun--Bick-wheat-improvement-

From: opisethanol@opisnet.com [mailto:opisethanol@opisnet.com]
Sent: Monday, April 08, 2013 10:38 AM
To: OPIS Ethanol Updates
Subject: BIOFUELS UPDATE: ***RINs Rally into The 80s and 90s as Word of New EPA Estimate Spreads

2013-04-08 11:37:27 EDT
***RINs Rally into The 80s and 90s as Word of New EPA Estimate Spreads

It may not qualify as RINsanity, but values for 2013 Renewable Identification Numbers, or RINs, are up sharply this morning, in recognition of the revelation that 500 million less RINs were carried over from 2012, according to numbers released by the Environmental Protection Agency over the weekend.

The carryover of 2012 RINs into 2013 was just 2.1 billion gallons, down from the prior estimate of 2.6 billion gallons, and news of the lower number has sent bids streaking higher this morning. Latest bids for 2013 ethanol RINs were in the realm of 80-81cts/gal with confirmation that at least one transaction was done at 81.5cts/gal with sellers left over at 83cts/gal.

That would represent an increase of more than a nickel from Friday, and it would also represent a rebound of more than 25cts/gal from some of the softer numbers seen toward the end of March. The price for 2013 RINs began the year at just 7cts/gal, and then ascended to $1.10/gal during the worst of the winter buying frenzy.

There is less talk about biodiesel RINs, but sources say that prices continue to track around 10cts/gal above the ethanol RINs. A 92cts/gal deal was recorded this morning for 2013 RINs.

At least one exchange is excited about leveraging the volatility and the lack of transparency that has come to be associated with RINs trading. The CME has launched an effort to initiate a RINs futures market. OPIS will have more details on this effort today.

Christopher Steinhoff
Market Analyst
800-328-6530
651-355-6558
651-355-3723 fax

www.chshedging.com

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CHS Hedging, Inc.
The Right Decisions for the Right Reasons

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.

Midday Comments from CHS Hedging's Ami Heesch 4-8-2013

From: Heesch, Ami
Sent: Monday, April 08, 2013 11:21 AM
Subject: Midday Comments for Monday, April 8, 2013

Highlights….

China officials confirm last week’s rumors of them purchasing a number of SRW cargos for Jun-Aug…….

USDA S&D report to be released at 11 AM on Wednesday this week…..

Equity markets quiet this morning…….US$ up 0.057 at 82.708….CD$ down 0.0015 at 0.9796….gold down 4-5 at 1575……Mini Dow down 39 at 1445.00…S&P up 0.25 at 1546.25…..

Corn……

Struggles to stay in positive territory, despite solid gains in the wheat and soybean pits…….

Weekly export inspections were reported at 10.1 million bushels versus trade estimates of 14-18 million bushels…

Country movement fairly quiet this morning….basis not doing much…….

K/N spread at 12 ¾ inverse  (10 ¾-13 range)…..some think we will not see single digits on this spread given the lack of movement and current cash markets…..

Beans……

Bouncing back after three days of bashing……despite ongoing concerns of bird flu in China (21 cases reported so far …death toll at 6)…..

Weekly export inspections were reported at 15.2 million bushels versus trade estimates of 12-16 million bushels….

Technical buying, along with bargain hunters emerged , which pushed prices higher this morning……

Position squaring ahead of Wednesday’s USDA data could also be providing some underlying support in the soybean market……

Cash markets firm on lack of country selling……

K/N spread holds around a 20 cent inverse (17 ½ -20 ¼ )…..could go higher on continued strength in cash markets and a friendly USDA report on Wednesday…..

SA struggles with rains delaying soybean harvest in Argentina……port congestion continues and loading remain slow…….no news of more Chinese soybean purchases….

Wheat……

Strength coming from Chinese SRW purchases…….poor US Plains HRW conditions……cold weather conditions in parts of the Black Sea region…..

Weekly export inspections were reported at 27.16 million bushels, above trade estimates of 17-26 million bushels…..

China says they will look to source more SRW to replenish their reserves….could be as much as 2.0 million bushels…..

More rain/snow events headed for parts of the US Plains this week…..weekly crop conditions out this afternoon at 3PM Chicago Time……

Al / CHEDG

Ami L Heesch Market Analyst 800-328-6530 651-355-6549 651-355-3723 fax www.chshedging.com Follow Us On:

CHS Hedging, Inc.
The Right Decisions for the Right Reasons

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

Overnight Highlights from CHS Hedging's Tregg Cronin 3-14-2013

Outside Markets: Dollar Index up 0.243 at 83.132; NYMEX-WTI down $0.29 at $92.23; Brent Crude up $0.02 at $108.26; Heating Oil down $0.0130 at $2.9110; Cattle markets are better, hogs weaker; Softs are weaker; Gold down $9.70 at $1578.60; Copper up $0.0105 at $3.5355; Silver down $0.323 at $28.630; S&P futures are up 4.00 at 1554.00, Dow futures are up 20.00 at 14,418.00 and Treasuries are weaker.  

After the Dow Jones Industrial Average hit new all-time record highs earlier this month, and the S&P 500 has moved within 11 points of its all-time highs, European shares are now nearing 5-yr highs as all seems to be well around the globe.  Overnight, the NIKKEI rallied 1.16%, and European shares are being paced by the FTSE MIB, up 1.0%.  A fair amount of economic data today including weekly jobless claims which are seen at 350,000.  The Producer Price Index is seen up 0.7%, but ex food & energy is up 0.1%.  In forex, the Norwegian Krone and Swedish Krona are getting pounded with the former down well over 1.0% against almost all major trading partners as Norway’s Central Bank signals they may cut rates.  The EURNOK is up 0.927% and the USDNOK is up 1.200%.

Snow moving across the northern plains overnight with light snowfall accumulating in the Twin Cities this morning.  Several locations have received 1-2” in MN.  System is moving into IA/WI/IL later today, but chances of snow remain high for the northern plains the next 7-days.  5-day moisture totals are calling fir 0.50-1.00” amounts across ND/MN/WI/MI while a separate system should bring 0.25-0.40” across KS and MO/IL/IN/KY/OH should see 0.50-1.7” in total with the majority falling tonight and tomorrow for the North and Sunday for the mid-South.  Patterns remain the same in the 6-10 & 8-14 with above normal precip and below normal temps seen for most of the Midwest.  Favorable pattern remains in place, although early planting might not be an option this year.

***At 83.126, the Dollar Index traded to the highest level since August 3^rd.  This matters.***

Continuation of lower prices overnight in the soy complex while grains continue to try and press higher led by wheat.  There is certainly some inter-market spreading taking place with a lot of the long soy/short grain spreads being unwound following the disappointing WASDE for soy bulls.  In addition, the technical crowd is beginning to jump on the deteriorating soybean chart picture, calling for lower prices.  Export sales will be the feature today, but it could be the last big week of bean and meal sales before starting the seasonal decline.  The wheat export total will be watched closely, although the details of where the wheat is going could be just as important.  Corn basis is on the defensive in Hereford, TX and at the Gulf and is undermining spread potential at least for now.

Overnight, Vietnam bought 15,000MT of Indian corn at $290/MT C&F.  More importantly, India reportedly sold 13,700MT of corn to China for April delivery at a price of $275/MT FOB and $320/MT C&F.  This was said to be a test run cargo, but it’s clear China is looking to diversify its corn needs outside of just the US.  Japan bought their 130,533MT of milling wheat from the US, Canada and Australia with around 64,000MT coming from the US.  Malaysia announced they are deferring the purchase of wheat import deals totaling 350,000MT to July-Sept on the anticipation of a rapid decline in prices.  Malaysia mainly buys from Australia.  Strategie Grains cut their EU-27 soft wheat estimate by 0.7MMT to 130.5MMT, but raised corn production by 0.4MMT to 64.1MMT.  Goldman Sachs was ranked No. 1 in commodities revenue in 2012 according to Coalition.  JP Morgan was ranked second and Morgan Stanley third.  The U.K. pig herd shrank to the smallest since 2000 as costs rise for feed, but the number of cattle and sheep increased.

Research group IKAR said Russia may purchase as much as 6MMT of grains for government stockpiles following their new crop harvest.  Russia has been aggressively selling grain from government reserves to cool domestic prices following their severe drought in 2012.  This could end up hampering exports depending on crop size in 2013.  Crude Palm Oil in Malaysia fell another 1.38% overnight, its fourth straight lower close.  This due in part to rising Indian cooking oil stocks, and the record amount of product waiting to be loaded at Brazilian ports, most of which is headed for Asia.  This is obviously weighing on Soybean Oil, and that chart has a Head and Shoulders Continuation Pattern forming, a particularly bad formation.

The wheat/corn spread and demand topic has received a lot of discussion in recent days.  Overnight, corn bids fell again in TX with shuttle values for spot trains indicated at +98K while April is +100K.  These are down 2-6c from yesterday, and down 5-8c from week ago values.  Feeders are actively taking wheat, and canceling or pitching out corn length where they can.  Along with CIF corn bids down 2-4c, this is having a pressuring effect on the CK/CN and a supportive feature to WK/WN.  Funds short a lot of WK, and could be forced to cover should this keep inverting further.

Open interest changes yesterday included wheat down 4,320 contracts, corn up 5,200, beans down 4,050, meal down 2,150 and soyoil up 4,100 contracts.  Let the short-covering rally begin in Wheat.  Chinese markets were soft with beans down 4c, meal down $7.80, soyoil down 29c, corn down 1.25c, palm down 77c and wheat up 1.25c.  Paris Milling Wheat is up 0.43%, Rapeseed down 0.27%, UK Feed wheat up 0.64%, corn up 0.56% and Canola is down 0.37%.  Deliveries overnight included 7 Chicago Wheat, 1 meal and 23 bean oil.  Worth noting, someone (thought to be LDC) canceled 545 March Chicago Wheat receipts in Toledo last night.  The total bushels would be 2.72mbu which is roughly 3 laker sized vessels.  This is probably headed for Europe, and remains supporting WK/WN.

Call things mixed to weaker to start, although we aren’t likely to keep wheat down for long if recent days are any guide.  Corn has somewhat of a bearspread bias at current which doesn’t bode well for continued futures’ gains.  Soybeans are developing a weak technical picture at the same time beans are leaving Brazil as they pass the 50% mark.  Domestic demand remains strong, but with reduced exports the $15.00 mark will be difficult to push through.

Tregg Cronin
Market Analyst
800-328-6530
651-355-6538
651-355-3723 fax

www.chshedging.com

CHS Hedging, Inc.
The Right Decisions for the Right Reasons

Afternoon recap from CHS Hedging's Tregg Cronin 2-27-2013

Outside Markets as of 2:00: Dollar Index down 0.256 at 81.607; NYMEX-WTI up $0.16 at $92.79;  Brent Crude down $0.81 at $111.90; Heating Oil down $0.0388 at $2.9929; Livestock markets are mixed with cattle up and hogs down; Softs are firmer led by Cotton which is up 3.35%; Gold down $22.60 at $1592.90; Copper down $0.0085 at $3.5745; Silver down $0.445 at $28.875; S&P’s are up 24.75 at 1516.75, Dow futures are up 200.00 at 14,060.00 and Treasuries are weaker.

---

Taught classes this morning, and in meetings this afternoon, so just a few comments on cash and spreads with some articles below worth a look through.

Markets continuing their rallies today on lack of farm gate movement, still firm cash markets, export business, rebounding ethanol production and most likely some light profit taking in the wheat pits.  The close wasn’t incredibly strong, and May corn failed to close above the vaunted $7.00 level.  $7.01 kick starts technical buying. Ethanol production continues to see a rebound in weekly production, poking back above 800,000bbls/day for the first time in seven weeks.  Stocks declined slightly, but remain rather large.  The improvement in margins has gotten plants back open, and the basis reflects their desire to get corn bought.  Still lots of ethanol plants in IL/IA paying +50K or more for trains, but the demand seems to be for AMJJ.  Truck corn might be a bit weaker at some.  Wheat’s discount to corn is starting to perk up the interest of a lot of feed lots both in the US and abroad.  Japan was in for SRW as feed wheat, the first time in quite a while.  KS/CO feed lots interested in HRW.  SRW working into southeast markets.  Isn’t whacking corn basis severely yet, but likely isn’t far off.

PNW spring wheat basis firming up with cash guys calling it up 20c vs. two weeks ago.  Doesn’t appear to be the guys who sold the Chinese business two weeks ago, so hard to tell if it is covering business already on the books, or if this is fresh demand.  To-arrive bids over Chicago not showing much life this afternoon, so would assume we have plenty of wheat to put out any fire.  A basis selling opportunity seems to be right around the corner on wheat.  Lots of wheat left on farm.  MWH/MWK rallied late, closing up 0.75c to -9.00c, but traded all the way into -7.50c as guys bought the spread instead of pumping up basis any further.

Dr. Michael Cordonnier said he expects Brazilian yields to fall as harvest progresses, not rise.  Deutsche Bank was in the news putting the Brazilian soy crop at 79-80MMT, by far the lowest in print and well under the USDA’s 83.5MMT.  Two cargoes to China for 12/13 and two cargoes to unknown for 13/14.  Fits with the business bantered about late last week.  The export pace we’re on is unsustainable.  Brazilian basis levels continue to fall, but this seems to be tied to importers refusing to pay up because they won’t get beans no matter what they pay, so why bid it?  Lineups on soy grow every day as you can see below.  Total soy and products lineup is 9.467MMT vs. 8.643MMT last week.  Corn lineup is 1.194MMT vs. 1.464MMT last week.

Shouldn’t be any deliveries against March corn or soybeans, but there are 1,882 March Chicago Wheat delivery certificates on the street, and these could see deliveries potentially.  Wouldn’t think there would be any spring or winter deliveries considering the basis is firm enough and works by 15-20c to load wheat out.

---

Deutsche Bank Says Brazil Soybean Crop May Be 79-80 Million Tons

2013-02-27 07:23:31.183 GMT

By Claudia Carpenter

     Feb. 27 (Bloomberg) -- Brazil’s soybean crop for 2012-13

may be 79 million to 80 million metric tons and corn 70 million

to 71 million tons, below the U.S. Department of Agriculture

estimates, Deutsche Bank AG said.

     Competition for soybeans to export in Brazil is “fierce”

as crushers and hog and chicken industries also want supplies,

Christina McGlone, an analyst at the bank in New York, said in a

report dated yesterday. The USDA’s estimates are 72.5 million

for corn and 83.5 million tons for soybeans.

     Supply is limited at ports because of delayed plantings,

late harvesting due to wet weather, new trucking regulations,

unrest with port workers and vessel line-ups, she said. That may

spur demand for U.S. supplies for now, she said.

China Buys U.S. Corn as Mold to Hit Local Supply, Yigu Says (1)

2013-02-27 07:32:25.332 GMT

     (Updates price in fifth paragraph.)

By Bloomberg News

     Feb. 27 (Bloomberg) -- Feed mills in China, the second-

biggest corn consumer, will probably order more U.S. grain on

concern that domestic supply won’t meet demand before the fall

harvest, researcher Yigu Information Consulting Ltd. said.

     Snow and rain in northern China have increased moisture in

farmers’ unsold grain, making it more vulnerable to mold and

less suitable as animal feed, said Feng Lichen, the general

manager of Yigu, which runs China’s biggest corn information

portal. Some mills are securing shipments from the U.S., the

biggest exporter, for deliveries later this year using newly

issued import permits from the government, as the cost of U.S.

corn has dropped, he said.

     China’s purchases may help stem an 18 percent decline in

Chicago prices from a record in August. The U.S. crop will be an

all-time high following the worst drought in seven decades, the

U.S. Department of Agriculture said on Feb. 22. Chinese mills

bought at least 120,000 metric tons from the U.S. last week, the

first purchases this year, two executives with direct knowledge

of the matter said on Feb. 22. U.S. corn exporters sold 127,000

tons to unknown buyers last week, the USDA said.

     “China’s corn shortage this year may widen to 5 million

tons from a previous projection of 2 million tons,” Feng said

by phone on Feb. 25 from Dalian in northeastern China, the port

city in the country’s biggest corn-growing region. “The crops

are just too wet, so as soon as the weather warms up next month,

mold will grow,” he said.

                          China Harvest

     The most-active contract on the Chicago Board of Trade has

lost 6.9 percent this month and was at $6.93 a bushel at 3:37

p.m. in Beijing.

     Traders are quoting prices between 2,220 yuan ($356) and

2,250 yuan a ton for September shipments of U.S. corn, including

freight costs, Zhang said. Futures for September delivery closed

at 2,433 yuan a ton on the Dalian Commodity Exchange.

     The USDA had said on Feb. 9 that China’s harvest in the

marketing season from Oct. 1 rose to a record 208 million tons,

cutting possible imports to 2.5 million tons from last year’s

5.23 million tons.

     Purchases by feed mills may have totaled more than 200,000

tons since last week, Cherry Zhang, an analyst at Shanghai JC

Intelligence Co., said Feb. 25. Buyers will proceed cautiously

on concern that U.S. prices may drop more, she said.

COFCO Gets $4.8 Billion Funding to Expand China Grain Processing

2013-02-27 05:10:27.984 GMT

By Bloomberg News

     Feb. 27 (Bloomberg) -- COFCO Corp., China’s largest grains

trader, said it will receive 30 billion yuan ($4.8 billion)

financing from China Development Bank Corp. to boost processing

and shipping of grains and oilseeds.

     The state-owned company will receive the money over the

next five years and use it to ensure the supply and safety of

grain and cooking oil, and for rural financing ventures to

promote development in farming areas, the Beijing-based company

said in an emailed statement today.

     COFCO is the parent of Hong Kong-listed China Agri-

Industries Holdings Ltd., the country’s second-biggest soybean

processor, and China Foods Ltd., the second-largest cooking oil

supplier.

Egyptian Wheat Stockpiles Will Satisfy 123 Days of Consumption

2013-02-27 11:28:12.198 GMT

By Abdel Latif Wahba

     Feb. 27 (Bloomberg) -- Egypt has 3 million metric tons of

domestic and imported wheat in stockpiles, enough to meet

consumption for 123 days, the cabinet said.

     Inventories of domestic and imported sugar are about

290,000 tons, sufficient to satisfy 71 days of local demand, the

cabinet said today in an e-mailed statement. The government has

142,000 tons of domestic and imported food oil on hand, enough

to meet consumption through the middle of May, it said.

Russia Grain Stockpiles to Fall to Record Low by July 1: SovEco

2013-02-27 09:42:13.246 GMT

By Marina Sysoyeva

     Feb. 27 (Bloomberg) -- Russian state grain stockpiles may

fall to 600,000-700,000t by July 1, SovEcon General Director

Andrey Sizov says at Grain Producers’ Union in Moscow.

  * Russian winter crop losses seen at 12%, Sizov says

  * Russian grain, legumes exports reach 14.3mt so far in season

    from July 1, Sizov say

  * Russian grain, legumes exports seen at 500,000 tons in Feb.

  * NOTE: 6.5% of winter crops failed to sprout or were weak at

    the end of February 2011; harvest was 94.2mt that yr, Sizov

    said

China Soybean Inventory May Decline to 4m Tons, Grain.Gov Says

2013-02-27 02:11:32.122 GMT

By Bloomberg News

     Feb. 27 (Bloomberg) -- China’s inventory of soybeans may

fall to 4m metric tons by end-March from 5.2m tons as of last

week, Grain.gov.cn said in an e-mailed report.

  * Arrival shipments may be about 7m tons in Feb.-Mar., lower

    than 8.66m tons a year ago, it says

  * Shipments may rise starting from April as supplies from

    South America increase, it says.

U.S. Corn Export Sales Seen Declining in Week Ended Feb. 21

2013-02-27 18:49:24.476 GMT

By Jeff Wilson

     Feb. 27 (Bloomberg) -- U.S. export sales of corn probably

fell in the week ended Feb. 21 from a year earlier, while

soybean-meal and soybean-oil sales rose, based on a survey of

five analysts by Bloomberg News. Estimates for sales of wheat

and soybeans ranged from below to above a year earlier.

     The U.S. Department of Agriculture is scheduled to release

its sales report at 8:30 a.m. tomorrow in Washington.

*T

                        U.S. Export Sales

              Estimate Range        Feb. 14, 2013  Feb. 23, 2012

Corn         125,000-400,000           361,826       689,959

Soybeans     300,000-700,000          (119,526)      549,108

Soybean Meal 125,000-300,000           236,132        40,016

Soybean Oil   10,000-30,000             28,872         4,769

Wheat        350,000-900,000           699,257       414,070

*T

U.S. Exporters Sell Soybeans to China, Unknown Destinations

2013-02-27 14:00:00.2 GMT

By Patrick McKiernan

     Feb. 27 (Bloomberg) -- The sale of 120,000 metric tons to

China is for delivery in the 12 months starting Sept. 1, and the

sale of 120,000 tons to unknown destinations is for delivery

before Aug. 31, the U.S. Department of Agriculture said today in

a statement.

Corn Spread Surges on Tight Pre-Harvest Supply: Chart of the Day

2013-02-27 00:00:00.5 GMT

By Jeff Wilson

     Feb. 27 (Bloomberg) -- Tightening U.S. corn inventories

will triple the spread between May and July futures in Chicago

as buyers scramble for pre-harvest supplies, according to Water

Street Solutions Inc., a researcher and farm-marketing adviser.

     The CHART OF THE DAY shows futures for May delivery on the

Chicago Board of Trade will surge to a premium of 45 cents a

bushel over the July contract, compared with 15.75 cents

yesterday, based on a forecast by Arlan Suderman, the senior

market analyst at Peoria, Illinois-based Water Street Solutions.

The spread would match the peak between the contracts last year,

when the worst drought since the 1930s sent prices to a record.

     While the government said Feb. 22 that U.S. farmers will

boost output by 35 percent this year as yields return to normal,

that grain won’t reach buyers for another six months.

Inventories before the harvest will be the lowest relative to

demand since 1974, U.S. Department of Agriculture data show.

     “U.S. corn supplies are forecast tighter than they were a

year ago,” Suderman said in a telephone interview yesterday

from Wichita, Kansas. “It’s all about rationing the reduced

supply from last year.”

     Demand for corn used as livestock feed and to make ethanol

has probably accelerated after prices tumbled to a seven-week

low of $6.8075 on Feb. 25, Suderman said. The USDA said last

week that domestic pork and poultry output in 2013 will rise 0.7

percent. A government mandate calls for refiners to use 13.8

billion gallons of ethanol this year, up from 13.2 billion last

year. Corn prices have tumbled 18 percent since reaching a

record $8.49 on Aug. 10 as output rose in South America and

prospects improved for a rebound in U.S. production this year.

     “There is a real concern among consumers that the U.S.

won’t have many bushels left before the harvest,” Suderman

said. “The spread will widen now to slow demand and maintain

adequate inventories before the harvest.”

Brazil Daily Soy Shipments From Major Ports: Summary (Table)

2013-02-27 15:26:16.581 GMT

By Dominic Carey

     Feb. 27 (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               

===============================================================================

                    Feb. 27   Feb. 26   Feb. 25   Feb. 22   Feb. 21   Feb. 20

                       2013      2013      2013      2013      2013      2013

===============================================================================

                   ------------------------# of Ships-------------------------

Soy total               164       162       156       157       150       149

Soybeans               124       123       116       116       108       109

Soybean oil              1         1         1         0         0         0

Soybean meal            12        12        12        13        15        14

Soy meal pellets        27        26        27        28        27        26

                  ------------------------Metric Tons-------------------------

Soy total         9,467,669 9,298,669 9,067,308 9,250,123 8,785,072 8,643,572

Soybeans         7,459,979 7,358,979 7,068,068 7,099,068 6,676,518 6,643,018

Soybean oil          5,000     5,000     5,000         0         0         0

Soybean meal       533,989   533,989   533,989   633,804   651,303   603,303

===============================================================================

                    Feb. 27   Feb. 26   Feb. 25   Feb. 22   Feb. 21   Feb. 20

                       2013      2013      2013      2013      2013      2013

===============================================================================

Soy meal pellets 1,468,701 1,400,701 1,460,251 1,517,251 1,457,251 1,397,251

Brazil Daily Corn Shipments From Major Ports: Summary (Table)

2013-02-27 15:26:06.668 GMT

By Dominic Carey

     Feb. 27 (Bloomberg) -- Following is a table detailing scheduled corn

shipments for vessels berthed, arrived or expected at major ports in Brazil,

according to SA Commodities in Santos, Brazil:

*T            

============================================================================

                  Feb. 27   Feb. 26   Feb. 25   Feb. 22   Feb. 21   Feb. 20

                     2013      2013      2013      2013      2013      2013

============================================================================

Ships scheduled        24        27        28        27        26        32

Metric tons     1,194,631 1,337,631 1,372,631 1,308,923 1,248,923 1,464,903

============================================================================

Egyptian Wheat Stockpiles Will Satisfy 123 Days of Consumption

2013-02-27 11:28:12.198 GMT

By Abdel Latif Wahba

     Feb. 27 (Bloomberg) -- Egypt has 3 million metric tons of

domestic and imported wheat in stockpiles, enough to meet

consumption for 123 days, the cabinet said.

     Inventories of domestic and imported sugar are about

290,000 tons, sufficient to satisfy 71 days of local demand, the

cabinet said today in an e-mailed statement. The government has

142,000 tons of domestic and imported food oil on hand, enough

to meet consumption through the middle of May, it said.

Ethanol Rin Credits Jump to Record 51 Cents, Blue Ocean Says

2013-02-27 19:23:28.99 GMT

By Mario Parker

     Feb. 27 (Bloomberg) -- The value of Renewable

Identification Numbers, or RINs, for corn-based ethanol in the

U.S. rose to a record 51 cents, according to Blue Ocean

Brokerage LLC in New York.

Grain Terminal Cites Sabotage, Declares Lockout

2013-02-27 19:40:18.596 GMT

By STEVEN DUBOIS

     Portland, Ore. (AP) -- A Pacific Northwest grain terminal

owner imposed a lockout on longshoremen Wednesday after saying

an "independent former FBI investigator" determined a union

leader sabotaged company equipment at the height of contentious

labor problems in December.

     United Grain Corp., part of the Japanese conglomerate

Mitsui & Co., said nonunion replacement workers will operate its

Vancouver, Wash., export terminal for "indefinite" period. The

company said it fired the union leader, whom it described as a

member of the bargaining team of Local 4 of the International

Longshore and Warehouse Union but did not name.

     "Deliberate attempts by an ILWU leader to damage equipment,

disrupt operations and put co-workers at risk cannot be

tolerated," United Grain CEO Gary Schuld said Wednesday.

     The union called the company's allegations unfounded, and

locked-out longshoremen immediately picketed outside the

terminal.

     "United Grain and its Japanese owners at Mitsui have failed

to negotiate in good faith with the men and women of the ILWU

for months, and instead chose to aggressively prepare for a

lockout, spending enormous resources on an out-of-state security

firm," ILWU spokeswoman Jennifer Sargent said in a statement.

"Mitsui-United Grain has fabricated a story as an excuse to do

what they've wanted to do all along, which is to lock workers

out instead of reach a fair agreement with them."

     Late last year, the company was among Northwest terminal

owners who declared an impasse on labor negotiations and imposed

a contract that included new, management-friendly workplace

rules.

     Columbia Grain said the sabotage occurred Dec. 22, days

before the impasse was declared. In one case, someone shoved a 2

-foot-long metal pipe into a conveyor, causing it to shut down,

the company said. In another, a vandal damaged a gear box with a

mixture of sand and water.

     The company, in a letter sent to the union, said an

"impartial and independent" former FBI investigator determined

the union leader was the culprit following an investigation that

included interviews, surveillance tapes and other evidence.

     No charges have been filed, but Schuld said the

investigator's report will be turned over to law enforcement

     More than a quarter of all U.S. grain exports move through

nine grain terminals on the Willamette River and Puget Sound.

The contract dispute initially involved six of those terminals

that operate under a single collective bargaining agreement with

the ILWU: United Grain, based in Vancouver; Columbia Grain,

based in Portland; Louis Dreyfus Commodities, which has grain

elevators in Portland and Seattle; and Temco, which has

elevators in Portland and Tacoma, Wash.

     United Grain has the largest storage capacity of any West

Coast grain export facility with more than 7 million bushels of

storage, according to the company's website.

     The U.S.-owned Temco broke away from the alliance in early

December and negotiated separately with the union. They

announced a five-year agreement Wednesday.

     "It's no coincidence that Mitsui-United Grain has chosen to

throw out unfounded charges by an unnamed 'investigator' just

days after the union membership ratified an agreement with

Mistui-United Grain's American competitors," Sargent said.

     The pro-management terms implemented in December eliminate

some employee perks and grievance procedures while giving

employers more discretion in hiring and staffing decisions.

Management, for example, can expand shifts to 12 hours, if

needed, and use elevator employees to help load ships.

Tregg Cronin
Market Analyst
800-328-6530
651-355-6538
651-355-3723 fax

www.chshedging.com

CHS Hedging, Inc.
The Right Decisions for the Right Reasons

Overnight Highlights from CHS Hedgings Tregg Cronin 2-22-2013

Outside Markets: Dollar Index down 0.080 at 81.381; NYMEX-WTI up $0.33 at $93.17; Brent Crude up $0.96 at $114.49; Heating Oil up $0.0182 at $3.1139; Livestock markets are lightly mixed; Softs are all firmer; Gold up $0.60 at $1579.20; Copper up $0.0015 at $3.5545; Silver up $0.051 at $28.75; S&P’s are up 7.75 at 1508.75, Dow futures are up 66.00 at 13,938.00 and Treasuries are mixed.

Not much for economic and financial news overnight with most equity indices higher.  European indices are mostly over 1.0%, and Asia had a mixed close.  The European Commission released their updated growth forecast for the Eurozone in 2013, seeing a -0.3% contraction, weaker than expected.  Little for economic data in the US today, with few notable companies reporting earnings.  Italians go to the elections polls Sunday and Monday.  Gird your loins for the sequestration fight next week ahead of the March 1 deadline.  Only notable currency moves are a sharp rally in the Aussie Dollar and Kiwi, after the RBA’s governor said he’s not interested in intervening in currency markets at this time.

More snow in the Midwest overnight with the water equivalent moisture table for the last three days below.  Additional snowfall is falling in IA/SD/MN/WI/MI this morning with 2-5” expected in those states today.  Hutchinson, KS received 14” of snow.  While not wishing to incite a fight over drought, will simply say this is a definitely a step in the right direction.  Forecasted precip maps show additional moisture hitting the central and eastern corn belt by next Monday and continuing through Wednesday.  Totals look like 0.40-1.12” of water equivalent.  Extended maps turn notably drier in the 6-10 for almost all of the Midwest and southern plains.  Temps will generally be normal/below with the cold focused in the southeast.  8-14 is similar.  Some light rains in Argentina overnight but should be dry until tomorrow night.  Forecast calls for 0.50-1.00” on nearly 100% of their growing areas.  More rain later next week.  Brazil still in good shape, although probably a little wetter than preferred in the north.

Sharply better overnight led by the soy complex as front month March was finally able to push through $15.00, something it hasn’t been able to do since October in any meaningful fashion.  News of additional soybean business, and continued bottlenecks in South America are behind the buying, and it is likely we see additional sales to China either today or early next week.  As much as 7MMT of beans are waiting to be loaded in Brazil, and the port strike today and Tuesday won’t aid logistics.  The strike is said to include containers only, not bulk grain, but will likely affect all loadings.  There is also a stranded ship at an Argentine port.  The pickup in sales won’t show up on this morning’s weekly export sales report, so don’t be surprised at a low number today.  Fortunately, prices in China are confirming the SAM problems with beans and meal rallying sharply there overnight as demand pull becomes more serious.  Chinese analyst JC Intelligence Co said China may have bought 400-500,000MT of soybeans from the US this week alone.

In addition to the soybean business, Bloomberg reported this morning China’s feed mills bought at least 120,000MT of corn from the US for Sept/Oct delivery at $290-300/MT.  This would be the first purchases of corn by China from the US in quite some time.  Their market is in a huge carry while ours is in a large inverse.  Aside from the grain buying, comments from the Ag Minister of China were also supportive.  “China has a structural shortage” of its grain supply because demand continues to rise.  “Chines faces a very difficult task balancing its grain demand and supply.”  Japan was in for some wheat last night, buying 37,773MT of food wheat, 24,026MT of food barley and 5,000MT of malting barley.  The food wheat came from Australia and Canada.  The USDA is on the tape this morning with their full Outlook Conference balance sheets, but I’ll just send out an update later.  Markets aren’t paying attention to them anyway, and justifiably so.  Canada has left its 13/14 wheat production estimate unchanged at 28.5MMT, up 4.8% from a year ago.

Open interest changes during yesterday’s session included wheat down 6,960 contracts, corn down 4,030, beans down 5,850, meal up 100 and soyoil down 1,290.  March option expiration today, and it looks like we’ll put some squeeze on the $15.00 calls and puts.  I still won’t rule out a tangle with the $7.00 strike in corn at some point.  Chinese markets were sharply better last night with soybeans up 30.50c, meal up $12.70, soyoil up 34c, corn up 4c, palm up 20c and wheat up 0.75c.  Malaysian Palm Oil was down 2 ringgit at 2,534.  Paris Milling Wheat is up 0.10%, Rapeseed up 0.53%, Corn up 0.56%, Canola up 0.44% and UK Feed wheat up 0.15%.

Soybean basis firmed off the PNW and in the Gulf last night, but remains very thin.  Posted numbers on shuttles for spot trains are +165H or better, while CIF bids are back above +80H for beans.  Corn basis also continues to firm at both export terminals as well as domestic locations such as ethanol and feedlots.  Any wheat basis strength is about poor logistics and the CP being 2 weeks late on want dates.  Cars simply aren’t moving.

Call things firmer today as beans continue to do export business we really can’t afford to do.  Corn and wheat should trade higher in sympathy, but need to see the kind of export demand beans are seeing to really get excited.  Corn needs a rally to fill the domestic pipeline, but traders are focused on weather right now.  Until futures pop, farmers aren’t going to be willing sellers of corn.  Wheat might not have a choice.  Export sales at 7:30.

Trade as of  7:10

Corn lightly mixed

Beans up 15-17

Wheat up 1-2

Tregg Cronin
Market Analyst
800-328-6530
651-355-6538
651-355-3723 fax

www.chshedging.com

CHS Hedging, Inc.
The Right Decisions for the Right Reasons

Afternoon Recap from CHS Hedging's Tregg Cronin 2-13-2013

Outside Markets as of 1:00: Dollar Index down 0.025 at 80.081; NYMEX-WTI down $0.24 at $97.27; Brent Crude up $0.08 at $118.74; Heating Oil down $0.0178 at $3.2184; Livestock markets are mostly weaker led by feeders down 1.50%; Softs are pretty mixed; Gold down $7.50 at $1642.10; Copper down $0.0035 at $3.7405; Silver down $0.229 at $30.795; S&P’s are up 1.75 at 1518.00, Dow futures down 17.00 at 13,956.00 and Treasuries are soft.   

Mostly better than expected economic today supported, but equities consolidated near recent levels.  Investor sentiment remains overwhelmingly bullish, and susceptible to correction.  The biggest surprises were several moves in the forex market after Bank of Englad chairman Mervyn King said the Bank would continue to support the economic recovery, even if it meant higher inflation.  This trounced the pound and sent pound/dollar to $1.5538, the lowest level since 8/3/12.  Pound/Krona fell to the lowest levels since 1992 and Pound/Kiwi fell to the lowest level on record.  The Argentine 5-yr Credit Default Swap rallied 304bp to 2,519bp, the highest since November 28^th.  Not sure what the recent developments there are, but something to monitor.

---

Corn

Lower with our ninth consecutive lower close which is the longest streak of lower closes since December of 1980.  That’s right, the longest lower streak in 32 years.  In September of 2008, we had 8 lower closes and one unchanged, so this would technically be longer.  New crop managed a higher close for the second day in a row, but we just can’t seem to spark speculative interest in our Ag space right now.  Better weekly ethanol production, lighter ethanol stocks, firmer basis, firm spreads and no movement has yet to spark buying, and index funds are coming out based on their holdings as a percent of total open interest.  The news of Barclays getting out of either hedge fund trading or index fund trading has the market a bit spooked we could see other banks make similar moves…

Weekly ethanol production totaled 789,000bbls/day, up 15,000bbls/day from a week ago, and the highest production total in three weeks.  Stocks fell by 598,000bbls to 19.500 million bbls, which also was a positive signal.  With margins slowly improving, and thought positive by $0.37/bu vs. $0.09/bu a week before, chatter has a couple more ethanol plants coming back on line.  Obviously the ability to source corn, based on the price require to obtain it, has a big say as does the integrated nature of these plants and whether they can extract corn oil.  Imports did rise to 11,000bbls/day from zero the week before, however.  Brazilian corn lineups continue to shrink with current reports putting it at 1.33MMT vs. 2.09MMT a week ago.  Some analysts are still optimistic for better exports Mar-Jun.  Also interesting to note the crude oil/corn ratio and the RBOB Gasoline/Corn ratios are at their highest levels since June thanks to the run up in energy and the selloff in corn.  Board cattle crush for August is at the highest level since November.

CIF corn bids continue to rally with no offers really visible.  There are no trades to report either, so will keep using +65H through FH-Mar and +63H for LH-Mar.  Still puts Illinois River basis 9.7-12.5c above delivery equivalence.  Should continue to promote CH/CK bullspreads up to a dime assuming farmer movement remains slow and economics remain the same.  Rail markets continue to scoot higher as well with +120H widely bid off the PNW, +20H for Group 3 rail and Hereford, TX said to be trading +100/102H.  ADM-Marshall is firm at +5/8H, Decatur is paying  somewhere around +40H and Clinton is +34H for quick ship trucks.  The CH/CK traded all the way to +3.75c before closing at +1.50c, but should retain a firm bias.  CN/CZ fell another 4.0c to +120.00c, the lowest since Jan 11.

---

Wheat

Wheat closed higher for the first time since Friday, pumped up on “oversold” technicals, rumors of export business to China, firmer cash markets at the Gulf and a continued lack of movement on all classes of wheat.  Most seem to be expecting a solid week of export sales tomorrow considering the rumors of business to Turkey, Egypt, Europe, Brazil and China.  The fresh one today was some spring wheat connecting to the Orient off the PNW today, although details were sparse and there was no one to definitively say it was US-HRS vs. CWRS.  The market also seemed to absorb the moisture event across OK/TX from the day before, but isn’t quite ready to accept a change in moisture patterns across all of HRW country.  There is business around, just not sure how much we’re doing yet.

Headlines included Egypt coming out proclaiming they have enough wheat to meet domestic consumption for 133 days.  Total stocks of domestic and imported wheat total 3.28MMT.  This doesn’t mean they won’t import again, and in fact, usually one of these reports is followed by a tender announcement.  Egypt will still buy if the price is right, just announcing they have ample stocks should they need to get by.  French wheat plantings are expected to rise 2% y/y, while Germany is expected up 3% according to FranceAgriMer.  Jordan is tendering for 100,000MT, Iraq bids are due today with validity until Feb 17 on 50,000MT.  British analysts said wheat plantings in that country are expected to be smaller than the November estimate of 1.756 million hectares due to wet conditions.  “The wheat crop in general isn’t in great shape.”  Also why they’re expected to import wheat again in 13/14, the first back to back years since at least the early 90’s.

Spot floor trades were lightly mixed with 14.0% at +100H.  15.0% is +100/110H.  Spot floor report says there were 93 cars including 3 trains which would be heavier than recent days.  To-arrive bids remain around +90/95H for exploders and around 10-15c less on shuttles.  In figuring delivery calculations on spring wheat, it is getting very close to being able to take delivery in Duluth and rail against the Chicago market.  Triple digit to-arrive bids would likely make it work, and therefore would be where the commercials would rather buy the MWH/MWK than pay the country.  In other words, take a look at rolling any basis length and short hedges forward still remaining at current market levels.  Might leave a penny on the table, but better than getting run over by the commercials.  Wheat/corn spreads rallied today, but remain in recent ranges.  SRW/Corn at +40.00c is probably still priced to feed as is HRW/Corn at +84.75c.  Gulf basis was firmer with SRW up 2-3c to +80/83H bid, while HRW as around 1-2c lower but still bid +125/130H.

---

Ran out of time for soybean commentary.  Make up for it tomorrow.

Tregg Cronin
Market Analyst
800-328-6530
651-355-6538
651-355-3723 fax

www.chshedging.com

CHS Hedging, Inc.
The Right Decisions for the Right Reasons