3/5/2015 Morning Comments

Good Morning,

 

Outside Markets as of 5:35am: Dollar Index up 0.2030 at 96.1690; Euro down 0.00240 at 1.10510; S&P’s are up 2.75 at 2099.25; Dow futures are up 23.00 at 18,109.00; 10-yr futures are down 0.06%; The Nikkei closed up 0.26% at 18,751.84; The DAX is up 0.50% at 11,447.25; The IBEX-35 is up 0.41% at 11,096.50; Gold is down $0.90 at $1200.00; Copper is up $1.45 at $267.40; Crude Oil is up $0.50 at $52.03; Heating Oil is up $0.0028 at $1.9041; Paris Milling Wheat is up €0.50 at €186.75/MT.

Chinese officials announced an official growth target of about 7% last night, down from 7.5% last year following growth in 2014 of 7.4%, its slowest in almost 25 years.  7% growth is still an incredibly robust economy by any developed countries’ standards, but compared with growth throughout the 2000-2013 time frame, 7.0% could feel like a recession to the people and business owners of China.  There will be growing pains as China transitions to a service based economy with a more mature population and larger middle class.

Crude oil inventories stayed the course this week, building by another 10.3 million bbls, blowing away analyst expectations for a build of 4.60 million bbls.  Total crude inventories now measure 444.37 million barrels, the highest on record.  Some analysts think storage tanks measuring 85 million barrels located in Cushing, OK are now close to 2/3’s full, and at the recent rate of increase, could be completely filled by mid-April.  Despite the negative news, crude oil prices managed to close up by more than $1.00/bbl, a possible sign peak oil production has been mostly priced in.  Elsewhere, the US Dollar Index rose to fresh 11-year highs yesterday of 96.0590, thanks in large part to a plummeting euro as the EU gets set to kick off their own QE program.  Also, Brazil’s central bank raised borrowing costs for a fourth straight meeting to the highest level in almost six years as monthly inflation jumped to the highest since 2003.  Benchmark lending rates are now 12.75% in hopes of combatting the rapidly deteriorating Real which dropped to a 10-yr low yesterday.  Recent economic data out of Brazil suggests 2015 economic contraction could be as much as -0.58%.

A giant band of moisture moving from E-TX to ME this morning with a mix of snow, rain, sleet and other wintry mix, especially along the Gulf Coast.  The majority of the expected precip should finish up in the next 6-12 hours which will add to the 48-hour precip totals seen below.  There are still large swaths of the central/WCB as well as southern plains which are running moisture deficits over the last 30 and 60-day time periods.  Extended maps from NOAA suggest a warm, dry stretch of weather during the 6-15 day which will have farmers chomping at the big as this gets us out to the middle of March.

 

Mixed to weaker markets this morning following the sizable losses Wednesday, although wheat contracts haven’t been able to penetrate either the January or September lows just yet.  Soybeans on the other hand have now managed to plunge through both the $10.00 handle as well as the 50-day MA, both of which are going to keep trend followers more apt to sell soybeans than buy.  In addition, soybeans failed at support levels at $9.9425/50, and could possibly be setting the stage for a larger head-and-shoulders pattern in coming sessions.  Corn has remained especially resilient while wheat and soybeans have sold off, preferring instead to keep coiling inside recent flagging action.  Corn volume has also dropped considerably during the recent consolidation with yesterday’s volume of 195,122 contracts the lowest since 1/27.  Corn seems to be priming itself for a breakout, and given the weak trade posted by corn and soybeans, it would certainly be against the grain for a substantial rally.  The next major fundamental input for our markets will be the Marth 10th WASDE next week.

As was feared by several analysts, the 250 WH5 deliveries posted by Nidera Tuesday evening were in fact US 2 SRW 3ppm vomi, which hung on spreads heavily during the session Wednesday.  After trading as high as +8.50c Monday, the WH/WK hit -3.75c Wednesday before recovering while the WK/WN hit a low of -7.25c.  With over 1mbu of off-grade wheat having been dumped into the delivery warehouse system, stoppers of futures now have the uncertainty of knowing what grade of wheat they will receive when standing on paper.  This proposition is obviously a risky one for any end user needing a specific quality grade, and sellers reacted accordingly. There are some analysts who believe the deliveries are enough of a game-changer they could push WK/WN beyond full delivery storage carry, enacting an increase to the variable storage rate.  Either way, puts great emphasis on the 15/16 crop.

Spring wheat basis firmed noticeably on the Minneapolis spot floor, improving by 10-125c for 13.0% pro and 14.0-15.0% pro.  Going home, 14’s were indicated at +245K and 15’s at +500K.  The bid for high proteins is getting back to the high-water mark witnessed last fall when the quality scare was in full swing.  Movement by elevators and selling by farmers has slowed down considerably as futures have dropped down to September and January lows once again.  There were only 38 cars on the spot floor Wednesday.  One should be watchful for any confirmation by calendar spreads which would suggest being wary about pressing futures “down here.”  KCBT spot floor premiums saw isolated strength, but the majority of classes were unchanged.  No change to CIF NOLA SRW bids at this juncture.

Corn basis saw a nice jump at several locations Wednesday, partially in response to the lower board and lack of farmer selling, but also due to a worsening of railroad performance.  PNW corn shuttles went home bid +108K for this week and +106/102K for FH-Mar/Full Mar.  These sort of levels would compare with +99/97K a week ago, or up 7-10c depending on the slot.  Group-3 basis was steady vs. Tuesday at -1K, but up 6-7c from week ago levels.  There were also several destination ethanol plants which showed improved basis of 2-3 w/w.  CIF NOLA corn premiums were relatively static, however, undoubtedly showing pause due to the heavy deliveries this week.  CIF NOLA corn went home at +53/55K for Mar, +53/54K for AM and +48/51N for JJ.  CIF NOLA soybean premiums did have a decidedly negative tone compare with late last week and early this week.  The entire trucker strike premium has been extracted.

Weekly ethanol production saw another modest decline of 16,000bbls/day to 931,000bbls/day, which put the rate right at the needed weekly level to hit the USDA’s corn demand for ethanol forecast.  Stocks also dropped 66,000 bbls to 21.528 million barrels, still near the highest levels since April 2012.  The recent string of exceptionally strong ethanol production rates has provided a strong buffer against softening production as of late, which should prevent any need for an update on next week’s WASDE report.  In addition, RBOB/Ethanol spreads have rebounded sharply with the nearby spread trading around 42c/gln and the 6-month strip trading at 37.6c/gln.  This would compare with ethanol trading a premium to RBOB just a couple of months back, a situation which killed any and all discretionary blending above and beyond the mandated level.

Export sales out later this morning are expected to come in as follows: wheat 350-750TMT; corn 700-1300TMT; beans 200-600TMT; soymeal 0-225TMT; soy oil 5-20TMT.  Traders will be watching soybean and soymeal sales closest following the slowdown in sales and shipments of soybeans as of late as well as the net cancellations witnessed in soymeal last week.

 

Bottom Line: Keep an eye on export sales for early price direction as traders will be watching closely to see if the soybean program is over and if the corn program can sustain recent performance despite cheap stem from Ukraine and Argentina.  Technicals are slipping negative, and currency influence has been mostly negative towards our space.  The Brazilian, Ukrainian and Argentine currency moves are playing a bigger role than they ever have, and monitoring events there will be important during 2015.  A rebound in price today seems probable.

 

Good Luck Today.

 

RFC 3-5

 

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

 

3/4/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:50am: Dollar Index up 0.2580 at 95.6410; Euro down 0.00520 at 1.11280; Brazilian Real is off 2.13% to 2.9967; S&P’s are down 6.75 at 2098.00; Dow futures are down 49.00 at 18,138.00; 10-yr futures are up 0.10%; The Nikkei closed down 0.59% at 18,703.60; The DAX is up 0.02% at 11,282.87; The IBEX-35 is down 0.19% at 10,993.30; Gold is up $0.90 at $1205.30; Copper is up $0.35 at $266.00; Crude Oil is up $0.41 at $50.94; Heating Oil is down $0.0176 at $1.9219; Paris Milling Wheat is unchanged at €186.75/MT.

The Brazilian Real is trading especially weak this morning, nearing the 3:1 level against the US Dollar for the first time since August 2004.  Fears that the political and economic situation in South America’s largest economy are growing worse seem to be driving the rout.  Brazil’s chief prosecutor asked the Supreme Court to investigate 54 people, including politicians, for alleged involvement in a huge kickback scheme at state-run oil company Petrobas.  On Monday, the trade ministry sad Brazil had a trade deficit of $2.8 billion in February the worst result for the month since 1980.  The 12-month trade deficit is now -$3.8 billion compared with a $1.4 billion surplus during the same period ended February 2014.  A weak currency will continue to make soybean prices in Brazil more attractive to growers there.  Traders are looking for a weekly crude oil inventory build of +4.0 million bbls, adding to the massive string of increases since the 1st of the year.  Crude inventories in the US are now 12.6% higher than the beginning of the year and 21.7% higher than September’s 1-yr low.

A mix of precip moving across the southern plains, southern Midwest and ECB this morning with light precip already being recorded.  This system is expected to bring 0.50-2.50” to the area from E-TX to WV over the next 3-days.  Following this round of precip, things are expected to quiet down quite a bit in the extended time frame with below normal precip for the entire country.  The 8-14 sees more normal precip patterns, but above normal temps will be the feature during the 6-15 day.  This will begin to melt snow cover and possibly firm up fields for fieldwork or seeding.  Corn planting has already begun in TX with 4% planted being reported as of Monday.

 

Softer overnight markets for all of the Ag markets as futures grapple with a rapidly declining Brazilian currency, surprise deliveries against the WH15, solid precip returns expected across the south and eastern US wheat belts and indications spring could be early this year as opposed to late like the last two.  Wheat and soybeans have been the focus of the selling pressure, but both have yet to violate serious technical support which would open up a new wave of selling.  The corn market is still flagging into declining volume which could be setting the stage for a breakout in coming sessions.  Be watchful for any minor term momentum failures.  Weekly ethanol production on tap at 9:30am which most think will lead to another decline as margins remain relatively low compared with inputs and outputs.  The US farmer remains a subdued seller due to both price and the calendar.

The big overnight news were the 250 deliveries posted against the WH15 by Nidera which most think are going to be US 2 SRW 3 PPM vomi, or feed wheat in effect.  It is no secret the last two years have witnessed poorer than average soft red wheat quality, and the CME deliverable stocks report has confirmed that week after week.  What we haven’t seen, however, is any major commercial deliver this poorer quality wheat at a discount of up to 20c to US 1 SRW certificates.  This would lead one to believe a couple things: 1) calendar spreads could see pressure both up front and deferred as this wheat just gets rolled and rolled until it can be adequately blended off.  The WH/WK is off 3.0c overnight and the WK/WN is off 1.0c.  2) KC wheat could begin to exert more premium over Chicago given its lack of quality concerns and the potential for customers to turn to KW instead of W via delivery supplies.  3) It could set the stage for additional off-grade wheat supplies to be delivered at a discount if the cash market isn’t willing to pay for anything but US 1 SRW 1.25ppm vomi or less which would meet GASC specs.  There is no shortage of wheat in the US, just a shortage of quality wheat.  There were 1,065 corn re-deliveries also.

The soybean market continues to react to the weakening trucker strike and a weakening Brazilian currency.  Only a handful of roads remained blocked in Brazil as of Tuesday evening, according to Reuters.  There were seven protests over rising freight costs affecting federal highways, down from 18 on Monday and down from 100 a week ago.  With the Brazilian Real continuing to plummet, soybeans priced in Brazilian Real are actually trading at around 29.90 reals/bushel, the highest level since August while CBOT soy prices remain in the lower half of their Oct-Feb range.  CIF NOLA soybean premiums are reflecting the same with a softer tone, and in some cases no bid for spot barges.  Spreads haven’t suggested anything different with the SH/SK and SK/SN trading down to the lowest levels since 2/17.  The global soy pipeline appears adequately stocked for the time being.

While still on the topic of South America, Brazil did release updated planting and harvesting data yesterday with Brazilian soybean harvest advancing to 28% from 17% last week and compares to 41% last year and 32% average.  1st crop corn harvest was estimated at 26% vs. 21% last week and 41% in 2014, while 2nd crop corn planting was pegged at 58% vs. 40% last week and 56% last year.  Informa economics released updated South American soybean production estimates yesterday during the session and pegged combined Braz/Argy/Para production at 159MMT vs. 148.321MMT in 2013 thanks to Argentine production being raised all the way to 58MMT, a new record.  Next year they see the three country production pushing to 163.35MMT thanks to Brazilian production of 97.5MMT, a new record.  World corn production looks set to decline noticeably in 2015, something traders will need to monitor.

Draws were reported on the deliverable stocks reports for both SRW and HRW this past week.  Total wheat stocks of SRW fell to 56.2mbu from 57.464mbu last week and 45.149mbu last year.  Deliverable grade supplies of SRW were reported at 36.951mbu vs. 37.434mbu last week and 42.017mbu last year.  HRW supplies fell to 41.639mbu from 42.313mbu last week and 50.993mbu last year.  HRS supplies in Duluth/Superior and MPLS were essentially unchanged on the week.

 

Bottom Line:  The entire trucker strike premium has been erased from both futures and basis, indicating supplies are plentiful and disruptions minimal.  Wheat is feeling a two-pronged attack from heavy old crop deliveries which contain poor quality wheat, and moisture moving across the wheat belts as we get set to break dormancy.  Corn demand appears to be strong enough to support current levels, and new crop balance sheets are already more snug than most would prefer.  Hard to see positive trade today in my opinion.

 

Good Luck Today.

 

Radar 3-4

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

3/3/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:40am: Dollar Index up 0.0510 at 95.5220; Euro down 0.00290 at 1.11590; S&P’s are down 3.00 at 2111.00; Dow futures are down 19.00 at 18,229.00; 10-yr futures are down 0.11%; The Nikkei closed down 0.06% at 18,815.16; The DAX is down 0.04% at 11,406.27; The IBEX-35 is down 0.56% at 11,116.40; Gold is up $1.70 at $1209.90; Copper is down $3.75 at $266.00; Crude Oil is up $0.73 at $50.32; Heating Oil is up $0.0380 at $1.9255; Paris Milling Wheat is down €0.25 at €184.50/MT.

The walls seem to be slowly closing in around Mr. Putin, both economically and politically.  Russia’s finance ministry says the country’s foreign currency reserves dropped by almost 10% in dollar terms during the month of February, thanks again to low oil prices.  The fund dropped from $85.09 billion to $77.05 billion, the ministry said, as the government spent around $8 billion to support the budget.  The Ruble was a bit firmer this morning, holding around 65.35:1 against the US Dollar.  Crude oil calendar spreads saw a sharp reversal yesterday, a possible sign flat price has witnessed another intermediate term low.  The CLJ/CLK spread hit a low yesterday of -$2.49 before rallying to a high of -$1.80 and closing at -$1.93.  At the highs, the spread was up almost 20%, an incredible move for a calendar spread.  Last week saw large inventory builds, something which will have to stop before crude can bottom.

Snow moving across the Northern Plains and Great Lakes, while a wintry mix moves across the central corn belt this morning.  Accompanying the snow in the Northern Plains will be fierce winds in the range of 20-40mph, creating blizzard like conditions.  Movement of grain should slow the next 24 hours.  Actual precip returns are expected to be light in the Northern Plains, but the other system working across the Delta, mid-south and ECB will carry with it much more moisture to the tune of 0.75-3.50” in spots of KY and WV.  Moisture prospects will wane as we get later in the 7-day and into the 6-10 and 8-14 where much below normal precip will encompass the entire contiguous US.  Temps also look to warm to above normal throughout the 6-15 day period which should begin drying soils ahead of field work.

 

A bit better markets this morning as we recover from yesterday’s heavy selling pressure which spared few markets in its path.  An easing Brazilian trucker strike, better moisture prospects for wheat growing areas around the globe and still competitive corn supplies out of other export origins all combined to weigh on prices.  In addition, looking back at Friday’s rally, it would argue that the sharp reversal in price could have been month-end profit taking before positions were reestablished yesterday.  Most wheat charts did not see fresh contract lows yesterday, which will be viewed as a moral victory for bulls, while soybeans also managed to remain above support levels and did not compromise their technical structure further.  Corn once again finds itself producing flagging action which could be pre-empting another breakout.

Reuters reported yesterday striking truckers still blocked some major roadways in Brazil, even as the government cracked down on protestors.  As of yesterday afternoon, 23 road blockages in three southern states still existed, down from 99 points nationwide a week ago.  One major highway coming from Mato Grasso remained blocked as of yesterday, which could still suspend some supply arrivals.  As of yet, there has been no appreciable jump in front-end CIF NOLA soybean premiums which might suggest export business is swinging back to the US.  Still, these sort of shenanigans play out every year in Brazil and Argentina, which continue to remind buyers of the reliability from sourcing out of the US.  Going home last night, FOB prices across the Americas ranged from the US at $403.00/MT FOB for spot and $398.21/MT FOB for April vs. Argy for May at $384.62/MT and Brazil for spot at $386.29/MT FOB.

Canadian export data for the month of January was released late last week and showed some surprising statistics relative to expectations by the USDA.  Total wheat exports for January totaled 1.160MMT, up slightly from January a year ago.  MYTD shipments totaled 8.165MMT, up 6.08% from a year ago.  Exports of wheat to the US, however, totaled 69,800MT, down from 158,600MT a year ago.  MYTD shipments to the US total 462,200MT, down 57.8% from a year ago.  This would compare with the USDA’s marketing year import forecast being down 5.3% y/y.  Granted we did import somewhere between 2-5 cargoes of European feed wheat last fall, but even if all of these vessels were panamaxes, which they weren’t, the total would only be around 10mbu.  Simply put, the Canadian Dollar should be pushing more supply south of the border given the price discrepancy, but that has not happened during the first 6-months of the marketing year.  Quality could be a large factor as protein and overall quality were not high in this year’s Canadian wheat crop.  Exports to Western Europe are up 37% y/y with Africa up 22%.  Oats, on the other hand, are up around 14.2% y/y to 526,500MT through January.

Weekly export inspections were also released yesterday with corn posting the largest shipments of the marketing year to date.  50.4mbu of corn were shipped in the week ended 2/26, well better than the 34.3mbu needed to hit the USDA’s 1.750bbu export target. Total shipments to date now stand at 731.6mbu, up 3.2% from a year ago while the USDA’s marketing year forecast calls for an 8.7% decline.  Several weeks of heavy shipments occurred last year at this time, which it looks like this year will keep track with.  Wheat shipments were 16.5mbu, slightly below the 18.9mbu needed weekly to hit the USDA forecast.  Total shipments now stand at 623.4mbu, down 29.1% from a year ago.  Soybean shipments were 23.3mbu, above the 9.4mbu needed weekly but the smallest since September.  Total shipments are up 13.6% from a year ago.  Sorghum exports continue to plug along at 8.1mbu, well better than the 4.2mbu needed weekly to hit the USDA forecast.  Total shipments are now at 187.5mbu, up 189% from a year ago and will likely prompt another export increase from the USDA on the March WASDE report.

Several states released winter wheat condition ratings for the end of February yesterday, with most states seeing an improvement.  KS wheat conditions were rated at 44% G/E and 12% P/VP.  OK saw conditions at 42% G/E and 16% P/VP with 45% of their wheat being reported as grazed, up 3pts from a year ago.  TX wheat conditions were reported at 46% G/E and 12% P/VP.  Texas also reported corn planting progress at 4% vs. 7% average.  Oats planting was 100% complete vs. 100% average.  CO conditions were seen at 48% G/E and 11% Poor with top soil moisture at 71% Adequate and subsoil 49% adequate.  SD wheat conditions were reported at 49% G/E and 7% Poor while NE was 62% G/E and 3% poor.

 

Bottom Line: Could see a two-sided affair today as the turnaround Tuesday party meets the continued sell pressure of the funds which have reengaged after the start of a new month.  Corn demand is good enough to support prices above the $3.70-3.75 level for now it would appear.  Wheat prices also seem hesitant to make new lows until more is known about the Northern Hemisphere crop.  Soybeans are biding time until the market has full confidence in Brazil and Argentina taking over as the majority supplier.

 

Good Luck Today.

Canadian Wheat Exports 3-3

 

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

3/2/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:45am: Dollar Index down 0.1960 at 95.0970; Euro up 0.00370 at 1.12320; S&P’s are down 0.25 at 2102.50; Dow futures are up 2.00 at 18,129.00; 10-yr futures are up 0.04%; The Nikkei closed up 0.15% at 18,826.88; The DAX is down 0.03% at 11,397.84; The IBEX-35 is down 0.16% at 11,160.80; Gold is up $3.30 at $1216.40; Copper is down $0.70 at $268.45; Crude Oil is down $0.85 at $48.91; Heating Oil is down $0.0400 at $1.9337; Paris Milling Wheat is up €0.25 at €187.75/MT.

Tepid equity markets this morning after investor optimism faded following a weekend interest rate cut by the Chinese central bank.  The People’s Bank of China cut interest rates for a second time in three months over the weekend, axing rates for one-year loans by commercial banks by 0.25 percentage points to 5.35%.  The one-year deposit rate was reduced by 0.25 to 2.50%.  Rotary rig counts as compiled by drilling company Baker Hughes fell again in the week ended 2/27.  Total rig counts in the United States now stand at 1,267, down 43 from last week and 502 from a year ago.  The decline is also being felt in Canada with total rigs now at 330 vs. 360 a week ago and 626 a year ago.  Texas still leads the US with 570 rigs drilling followed by Oklahoma at 146 and North Dakota with 108.

The band of the US which has seen the lion’s share of moisture the past several weeks will continue to receive moisture in the 7-days ahead.  E-TX to PA is expected to see a band of precip come through bringing 0.50-4.50” of water-equivalent moisture with AR/TN/KY/WV being the area impacted most.  The entire US-SE will see precip measuring 0.50-0.75”, which should snarl travel further.  Not much moisture for the WCB and Northern Plains.  A big shift in precip outlook is seen with the 6-10 and 8-14 day, however, with well below normal precip expected for almost the entire contiguous US.  Temps will also be warming to above normal in the west and north with temperatures into the 50’s expected by the beginning of next week.  This outlook gets us out to March 15th, which could get some farmers anxious by the end of the period.

 

Fairly quiet overnight session with corn chopping around inside of a 3c range, wheat in a 2-4c range and soybeans a 10c range.  The big themes to close the week last week were the rally in Chicago wheat, and the impact of the Brazilian trucker strike.  After making new lows for the move, and the lowest trade since 9/25 on Thursday, wheat prices reversed hard, posting a key reversal followed by the 12c gains on Friday.  Fundamentalists were scratching their heads for an impetus to the rally, eventually settling on “technical considerations.” Considering the lack of basis changes to close the week, that reason will have to suffice for now.  The Brazilian trucker strike was also center-stage, although that situation appears to be slowly resolving itself, and the lack of front-end strength in CIF NOLA bids would also suggest the strike isn’t causing widespread panic.

CIF NOLA SRW bids went home bid +90K for spot barges, +85K for full month March, about unchanged on the week depending on where one rolled their WH/WK spread.  HRW premiums were firmer w/w at +140K at both the TX-Gulf and PNW, not doubt thanks to the Egyptian business conducted this week.  If five cargoes were in fact purchased, should leave around $20 million left in the Egyptian credit line to be tapped. Whether additional HRW is sourced now, or buyers wait until new crop SRW is available remains to be seen.  K/N wheat spreads closed Friday and are trading mostly firmer this morning.  The MWH/MWK got blown out to -10.50c on Friday thanks to heavy deliveries against the MWH contract.  No clear stopper has shown up yet with 266 contracts re-delivered this morning.  The spring wheat market is flush with low protein wheat this year, but the cash market prefers 14.0-15.0%.  Standing on delivery in Minneapolis only guarantees one 13.0-13.5% protein wheat which isn’t worth much this year.  Bids for 14.0% pro went home Friday bid +160/200K while 14.5% was +220/250K and 15.0% was +375/440K.

The Brazilian trucker strike was said to have clogged as many as 80 major highways the middle of last week, but the backlogged number was down to 59 Friday, 38 Saturday and 28 Sunday.  The remaining road closures were said to be focused around the capital and political buildings.  The idea of swing cargoes being sold out of the US provided strength for the rally, but neither cash nor spreads have suggested the same.  CIF NOLA soybean bids for prompt shipment were reported at +86/88H, trading in a narrow 4c range for most of the week.  One would certainly anticipate more front-end strength if cargoes were being sold in volume out of the Gulf.  The SH/SK spread does remain firm, however, trading up to -1.00c again overnight, the highest trades since June 2014.  The SN/SX also remains firm at +37.25c, near the highest levels since mid-January as someone remains concerned about carryout levels.

Wasn’t a great deal of feature in US cash corn markets to close the week, but the real story was Argentine cash premiums getting slaughtered.  By Friday, indications were for spot Argy maize cargoes were +43H/K through May, down 11-13c on the week.  Ideas about the Argentine maize crop are growing, no pun intended, with ideas of 25-26 or even 27MMT possible vs. the USDA at 23MMT.  Fresh export licenses were also issued for the new crop cycle, adding additional supply to compete with US stem.  Ukrainian maize values finally stabilized around +47H, remaining well under US replacement values, especially with ocean freight considerations factored in.  The real story in my opinion will be Ukrainian maize offerings in 2015/16 given the difficulty in sourcing inputs for the spring campaign.  Still, US corn has plenty of competition at current and export sales and loadings need to be monitored closely.

 

Bottom Line: Choppy start to the week with the situation in South America being monitored closely.  Wheat doesn’t have a story until the new crop cycle takes center stage and dormancy is fully broken in another 30-days.  Condition ratings from KS/OK/TX should be released after the close.  Corn demand remains solid, although more competition is showing up by the day.  Charts look good for additional upside in soybeans and wheat.

 

Good Luck Today.

HPC 3-2

 

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

 

 

2/19/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:10am: Dollar Index unchanged at 94.1980; Euro down 0.00120 at 1.13740; Loonie down 0.53% at 0.80030; S&P’s are down 0.75 at 2094.75; Dow futures are up 6.00 at 18,000.00; 10-yr futures are down 0.06%; The Nikkei closed up 0.36% at 18,264.79; The DAX is up 0.33% at 10,997.59; The IBEX-35 is up 0.60% at 10,869.90; Gold is up $17.80 at $1218.00; Copper is down $0.60 at $260.85; Crude Oil is down $2.00 at $50.82; Heating Oil is down $0.0371 at $1.8485; Paris Milling Wheat is up €0.50 at €186.25/MT.

Greece is on the tape once again this morning, although the Greek saga is proving much more boring to markets and traders this time around than the last.  The European Central Bank approved a €3.3 billion increase in emergency funding early this morning as leaders continue to hash out details of the Greek austerity package.  Crude oil is getting slammed again this morning, off over 3.50% as traders brace for another large increase in energy inventories.  The American Petroleum Institute reported US crude stocks as rising 14.3 million barrels last week, which if confirmed on today’s EIA data, would be the largest weekly build on record back to 1982.  Traders are only expecting a crude inventory build of +3.0 million barrels, but expectations have been broadly exceeded over the last 6-weeks.  $50/bbls appears to be a sticking point for the time being.

A brief respite in temperatures this weekend before another cold plunge next week, although the most bitter cold will be confined to ND/MN/IA and the rest of the Great Lakes.  Precip is also expected to remain below normal, centered over IA and MO during the 6-10 and 8-14 day outlook.  A bit better snow cover is present over the SRW belt going into the next cold snap than the previous one, although snow cover remains especially limited from SD to TX.  Temps Sunday/Monday will need to be monitored in NE/KS/OK where limited snow cover exists and temperatures look to dip down into the teens and single digits for lows.  Some weather forecasters are reporting heavier rainfall in Brazil, impacting early harvest efforts there.  It is early yet, but an increased rainfall pattern during harvest will be something to monitor.

 

Sharp reversals posted on all of our charts, with outside reversals left on soybeans wheat charts in particular.  In a ramp up to March option expiration tomorrow, soybeans hit $10.12 before heading lower, while wheat markets saw an about face when word hit the wires Egypt had rejected all offers in the US-only tender, citing high prices.  Much of the bullish momentum picked up from the previous 2-4 sessions was dented, and now markets await the USDA Outlook data tomorrow, which is expected to be mostly a wet blanket on the idea of higher prices.  Expect tomorrow to see erratic price action with option expiration, USDA Outlook Forum, Brazilian harvest pressure, cold temps across the US this weekend and potential headlines out of Greece and Ukraine.  Also important to remember there are seven sessions, including today, left in the spring insurance pricing period.

Beginning first with wheat and Egypt, offers were submitted by US exporters in a US-only wheat tender as part of the $100 million credit line extended to the Egyptian government for importing US grains.  Offers hitting the wire early yesterday morning included US-SRW or HRW at $287/MT FOB (seller’s options), US-SRW or SWW at $299.87/MT FOB (seller’s option), US-SRW at $292.88/MT FOB and US-SWW at $336.46/MT FOB.  Egypt quickly canceled the tender and sent futures plummeting as they balked at offers $50/MT higher than the last round of Black Sea and French business.  Also, many of the offers were out of tender terms with increase vomi specs and optional quality classes.  The lone SRW offer at $292.88/MT for guaranteed GASC specs, and using ocean freight of $22-25/MT equated to +205/210K vs. current FOB offers around +80K.  That price differential right there shows the availability and premium for low vomi-SRW in this market year: $1.30/bu.  Incredible.  For comparison purposes, HRW can be offered out of the TX-Gulf at +135/140H/K, and should be the class and quality used by Egypt, given its almost $0.70/bu cheaper.  The tender was also complicated by the credit line wrinkle, which may have pushed Egypt to wait and either tap it for cheaper HRW, or wait until new crop and buy higher (hopefully) quality SRW LH-June.  Either way, US quality is at a premium as cash traders have known since last fall.  Higher quality wheat will be a necessity in 15/16.

Impressively, however, H/K spreads hung in tough at all three wheat exchanges yesterday and overnight, a possible sign the selling yesterday was headline driven, not commercial.  US wheat is expensive for a reason; quality is scarce.  This doesn’t change with one cancelled tender.

A good segue into the weekly deliverable stocks reports with total SRW wheat stocks falling about 500,000 bushels combined at all six delivery locations.  Deliverable grades of SRW stand at 37.219mbu vs. 37.699mbu last week and 43.880mbu last year.  Non-deliverable grades now total 19.986mbu vs. 3.542mbu last year, a 464% increase y/y.  The chart below shows a quick recap.  HRW deliverable stocks fell 550,000 bushels w/w to 42.717mbu, down from last year’s 54.490mbu.  In HRS, stocks rose 111,000 bushels in Duluth/Superior, and 61,000 bushels in Minneapolis to put combined stocks at 26.701mbu vs. 18.301mbu at this point last year.  Non-deliverable grades are on par with week ago and year ago levels as protein is the chief consideration in the HRS this year.

Switching gears to South America, Brazil reported harvest progress yesterday, pegging soybean harvest as of 2/13 at 11% complete, an increase of 3% w/w.  This is about half the progress in 2014 of 21%, and less than 15% average at this point as rainfall suspends harvest efforts.  Brazilian 1st crop corn harvest was estimated at 15% complete vs. 9% last week and 21% last year.  Brazilian 2nd crop corn planting progress was listed at 28% complete vs. 17% last week and 27% last year.  The slow start to Brazilian soybean harvest is supporting basis for prompt delivery to the Gulf, keeping the US export window open a bit longer.  The lack of Brazilian farmer selling is also supportive, with analysts pegging the farmer at 25% sold vs. 40% last year due in part to currency considerations.  Using CIF bids of +82/85H, Zone 3 cash basis is around 3-5c above gross delivery equivalence.  FH-Mar is around 4c below, and full month March right at gross DVE.  This should support the SH/SK, and probably limit deliveries in the early going next week at least.  Corn bids are steadyish with Zone 3 cash around 4c below gross DVE, despite much cheaper Argentine and Ukrainian maize still being offered.

Weekly ethanol production on tap this morning at 10:00am due to the President’s Day holiday Monday.  Ethanol production saw a nice reversal last week with margins essentially unchanged on the week.  We’re probably finding out what the ethanol storage infrastructure can really handle, although RBOB has finally moved back to a sustainable premium over Ethanol with spot month at 9c over ETH, while April-August sits at 30c premium RBOB to ETH.  This is what has been needed to reignite discretionary blending, and offer drivers a reason to opt for higher ethanol blends at the pump which have been absent since December.

One last note, one prominent Ag weather forecaster made mention yesterday of the deteriorating condition in the South African corn belt as the crop pushes into pollination.  The western portion of the South African corn belt has received less than half of normal precip during the past month, and temps during the last week have pushed into the 90-100* range.  The weather forecaster was estimating national production losses of 10-15% at current, with up to 20% losses if rainfall does not improve before the end of the month.  South Africa typically produces around 12-15MMT of corn, and exports between 2.0-3.5MMT of that total.  Not a major exporter by any stretch of the term, but can impact trade flows to the Middle East if production declines are severe enough.

 

Bottom Line: Poor technical trade yesterday has several charts looking heavy, although the fundamental situation hasn’t changed all that much.  Headline risk will be high the next 48-hours and over the weekend, so position accordingly.  The market will be watchful for continued strong performance in corn demand today and tomorrow, especialy as next year’s balance sheets take center stage.  A delayed Brazilian harvest will keep the US in business a bit longer, and US wheat may continue to be a domestic feature.

 

Good Luck Today.

 

Deliverable Stocks of SRW 2-19-15

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

 

 

2/17/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:20am: Dollar Index down 0.2920 at 93.9130; Euro up 0.00370 at 1.14320; Loonie is up 0.81%; S&P’s are down 1.25 at 2092.25; Dow futures are up 3.00 at 17,985.00; 10-yr futures are down 0.15%; The Nikkei closed  down 0.10% at 17,987.09; The DAX is down 0.26% at 10,893.10; The IBEX-35 is up 0.11% at 10,701.50; Gold is down $4.70 at $1222.40; Copper is down 0.88% at $258.20; Crude Oil is up $0.35 at $53.13; Heating Oil is up $0.0183 at $1.9897; Paris Milling Wheat is up €2.00 at €190.75/MT.

Mixed equities around the globe this morning as investors remain wary of the Greek debt standoff.  Greece’s European creditors told it to ask for an extension of current terms so that talks continue, rather than defaulting on current obligations.  A final deadline of Wednesday still stands if no extension is agreed upon.  As the Financial Times point out this morning, the irony with Greece is the very same reforms which proved successful in Portugal and Ireland, were just beginning to bear fruit before the new elections set the country back 12-18 months.  The ceasefire in Ukraine is already crumbling after just 48-hours in place with the battle for Debaltseve intensifying.  Hopefully European leaders will be open to more economic sanctions against Putin after their most recent efforts have failed as sanctions have proven more crippling than talks successful.

Cold temperatures across the Midwest this morning with single digit and zero degree temperatures widespread across ND/SD/MN/WI/IN/OH/PA/KY, while NE/KS/OK sees temps between 15-25*.  Tomorrow morning’s temps will be even colder for much of the country as temps slide down to the single digits in NE, and OK/KS is between 5-20* F.  The SRW belt will see widespread temps below zero.  Extended maps from NOAA last evening confirmed a cold bias continuing in the 6-10 and 8-14, centered over the SRW belt.  This will keep the wheat discussion going given the lack of snow cover, the recent push to warm temps and the fact it is only February 17th.  Moisture patterns look mainly dry at the tail end of the 6-10 and into the 8-14 for the Midwest which won’t help slowly intensifying drought conditions in ND/SD/MN.

 

A strong overnight open and extending those gains through the night session to find wheat markets leading the charge this morning.  Wheat charts are now signaling another leg higher is in store by taking out the 2/6 corrective highs, with technicians drawing targets around $5.55-5.60 basis both WH and WK futures.  Corn and soybeans are also firmer this morning, although bulls might really get their resolve tested with futures knocking on $10.00 basis SH, even though SK and SN are sitting at $10.02-10.07.  Other than some near-term, spot-type business, a clear catalyst for soybeans continuing higher remains absent given the mountain of soybeans coming online next month in South America.  Be especially watchful for any short-term momentum failure, and both SH and SK need to take out their 2/3 corrective highs to even talk about another leg higher such as in wheat.

On the logistic front, it would appear the Canadian Pacific rail strike has been averted after just a day and a half of picket lines with workers and management agreeing to binding arbitration.  The Canadian government was about to take steps to force the approximately 3,000 striking members of Teamsters Canada back to work before both sides agreed on arbitration.  For now, it would appear a major logistical snafu has been avoided, although port workers on the US west coast remain at odds with talks ongoing.  While still on transportation, it should be noted ocean freight values may have finally bottomed, at least in regards to grains.  Several routes out of the Gulf to Europe and Gulf to Japan saw small increases w/w in timecharter rates, even though the larger Baltic Dry Index continued to decline last week.  The widely watched index fell from 564 to 540, and fell further to 535 Monday, the lowest since data began being reported in January 1985.  The ultra-cheap ocean freight has been an advantage for soybean exports out of the Gulf, keeping US stem competitive longer into the SAM shipping season.  If grain rates continue to bounce, this could contribute to the shift to SAM.

Friday’s COT data didn’t have a lot of earth-shattering changes, with funds slightly reducing their net long in corn to +64,003 contracts, the smallest since 10/21.  The Gross Commercial Long in corn continues to buy, however, upping his position to 466,234 contracts, the largest since 11/19/2013.  Soybeans continue to see commercials and funds diverge with funds selling 20,190 contracts to leave their net short at -77,519 contracts, the largest since 9/30/14.  Commercials continued to buy heavily, kicking their net long to +41,416 contracts, the largest net long since 10/14/14.  This is the same pattern of buying and selling which began back in August/September and coincided with the major fall lows.  It does strike this analyst as odd commercials continue to buy soybeans hand over fist with such massive SAM supplies in the waiting.  Commercials betting on higher prices, not lower?

Not much change in KC or Chicago wheat as the gross commercial buying came to a close last week as did the fund selling pressure.  Not sure if this is signaling a near-term pause in the excitement just as futures have gotten going?  Minneapolis wheat kept recent trends in place with commercials whittling down their net short to -3,306 contracts, the smallest net short since 9/17/2013.  The Gross Commercial Long in MPLS is long +33,309 contracts, the largest position since 11/6/2007.  Clearly commercials betting on higher prices in MPLS from a relative sense at least.  Aggregate positions across the 12-14 futures contracts didn’t change a whole lot with managed funds remaining net short while index funds retain the smallest net long since 2009.

On the cash front, traders made comment about possible Canadian soft red wheat trading out of St. Lawrence to Mexico with whispered trades occurring around +80H.  No doubt currency valuations at work once again as Canadian wheat following the lead of SAM soybeans in trading into what most consider “captive-demand” for US grain.  Canadian wheat exports have been solid so far during the 2014/15 crop year, although exports to the US have been especially limited through December.  A loonie at a consistent 80c on the Dollar should change that.  Cash trades also not incredibly competitive FOB UKR maize values following Argy maize premiums flatlining as well.  It remains difficult to quantify the currency aspect in our grain export trade, but it would appear the US Dollar is continuing to play a role here and abroad.  Corn and soybean spreads are firmer this morning, but wheat spreads are not.  Be especially watchful for any weakness in wheat premiums as a sign the spread strength and now the eventual futures rally has done enough to bend premiums lower.  That would be a sign our rally may be losing steam.

 

Bottom line: chart pictures are turning friendly on wheat, and knocking on the door in soybeans just as funds have re-amassed sizable short positions in both markets.  Corn would do well to take out the 1/20 and 2/9 corrective highs, and join the corrective rally party.  Fundamental traders still awaiting updated balance sheets at the end of the week from the USDA.  Taking the pulse of farmer engagement this week will be important to see where the natural seller decides to turn palms out.

 

Good Luck Today.

 

CPC 6-10 2-17

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

2/13/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:10am: Dollar Index up 0.0250 at 94.1270; Euro down 0.00060 at 1.14130; Brazilian Real down 0.78%; S&P’s are up 2.50 at 2086.50; Dow futures are up 30.00 at 17,962.00; 10-yr futures are down 0.18%; The Nikkei closed down 0.37% at 17,913.36; The DAX is up 0.55% at 10,979.60; The IBEX-35 is up 1.55% at 10,725.50; Gold is up $3.40 at $1224.10; Copper is up $0.30 at $260.50; Crude Oil is up $0.64 at $51.85; Heating Oil is up $0.0092 at $1.9229; Paris Milling Wheat is up €0.50 at €185.00/MT.

European equities rallied to near 7-yr highs this morning on better than expected economic data as well as hope for a compromise over the Greek debt situation.  The Eurozone grew 0.3% between Q3 and Q4 of 2014, slightly better than the 0.2% expected.  Growth was led by its largest member, Germany, who saw q/q growth of 0.7%, beating expectations for +0.3%.  Greece remains the truant, however, as its new PM argued for a new bailout agreement with fewer austerity demands.  Greece is set to start technical negotiations with the European Commission, the ECB and IMF today to determine which parts of the current bailout the Tsipras government will agree to maintain.  Major agri-business Bunge watched its shares selloff sharply yesterday after a big miss in Q4-earnings and revenues as volatility in its oilseed  business outweighed other gains.  Q4 sales in the agribusiness segment, Bunge’s largest by revenue, fell to $10 billion from $12.45 billion a year earlier.  Bunge also warned of third-party risk with lower-tier Chinese soybean importers which has added risk to its business overseas.  The Baltic Exchange’s main sea freight index slumped to 540 points, a new all-time record low back to January 1985.

NOAA’s extended models continue to come into alignment about the cold-snap next week which is centered over the ECB, but extends all the way to W-TX and W-ND.  It’s difficult to guess how much “below normal” temperatures might dip to, but the shade of purple being used on the maps below hasn’t been seen since last fall.  Should temps fall to zero or below, snow cover is far from adequate to prevent damage, especially in crops which have broken dormancy in the central and southern plains.  States with no snow cover would include NE/KS/OK/TX/MO/AR/TN/KY while only the northern ½ of IL/IN have any snow cover to mention.  Widespread damage isn’t expected at this date, but vigilance is warranted considering this is only February 13th, and another 2-months’ worth of frost risk still lies in front of the market.

 

Better markets so far as we get set to enter the long 3-day weekend with no grain markets until Monday evening.  For the week, corn finds itself down 1.5c, soybeans are up 14.25c and wheat is down 5.50c.  For being lower on the week, corn and wheat both are merely flagging in more of a consolidative effort than trending higher or lower.  Despite the fact we just received a refreshed set of USDA balance sheets for 14/15, it feels as though our markets are ready to begin trading 15/16 already and certainly looking forward to the USDA Outlook Conference next Friday.  Weekly demand indicators continue to support all three of our grains, and looking ahead to 15/16 highlights the need for solid corn and wheat conditions to prevent tightening balance sheets.  Soybeans are living on borrowed time, but for the time being, it looks as though they are quite comfortable borrowing.

Taking a quick look at export sales, most everything came in above expectations, including wheat at 15.0mbu vs. the 9.0mbu needed weekly thanks to the recently revised export forecast.  In the by-class breakdown, HRW led sales with 4.8mbu, but as impressive were the 3.6mbu worth of sales from White Wheat.  There is a lot of concern about the carryout level of SWW, and for good reason.  Corn sales were solid at 39.5mbu vs. the 17.1mbu needed weekly. Total commitments are down 4% from a year ago while the USDA forecast is calling for a 9% y/y reduction.  Soybean sales were 27.4mbu, well better than expectations or the 4.9mbu needed weekly to hit the USDA forecast.  Total commitments of 1.696bbu now account for 95% of the USDA’s marketing year forecast.  How long it takes Brazil to start shipping meaningful tonnage will hold the answer to the US soybean shipping season.

As mentioned above, the 15/16 corn balance sheet seems to be turning more interesting all the time.  Reports last night suggested Ukraine’s Oct-Jan seed corn imports were down 42% from a year ago, which suggests a sizable cut in corn production for the coming year.  Given 2014’s 28.5MMT production, one could reasonably suggest a crop in the 20-24MMT area which would be off 15-25%.  Obviously getting seed corn imports has been a struggle for farmers due to the Ukrainian Hryvnia dropping to all-time record lows, which should also make fertilizer procurement difficult.  Ukraine exported 20.0MMT of maize in 2013/14 and is expected to export 18.0MMT in 2014/15.  A 25% reduction in exports could mean a 150mbu shortfall in global supply.  Add in the likelihood of smaller corn crops in both EU and Brazil next year, and global exporter supplies could see a notable reduction.  If the USDA Outlook Conference releases acreage around 88-89 million acres for 15/16, expect CZ15 to receive a fair amount of support around $3.90-4.00 until planting and pollination have been deemed successful.

Wheat spreads were firm overnight, although off slightly heading into the day session.  WH/WK rallied to +3.00c yesterday, the highest trade since 4/1/2014.  The KWH/KWK hit -0.75c, the firmest trade since 12/1, and the MWH/MWK hit -0.50c for the third session in a row, tying highs since 5/15/2014.  H/K spreads are rallying into FND, just the way Z/H spreads did, which should make one cautious about avoiding the March rally by selling wheat in May.  The deliverable grade/milling grade supply of wheat in the US is in strong hands, which is unwilling to part with said stem until inverses really get painful.  Remember this point when making hedge placement decisions.  KCBT protein scales firmed again yesterday for 12.0-14.0% pro with 12’s and 13’s at +100/110H.  Compare this with +90/100H and +85/95H, respectively a week ago.  Call MGEX 14’s +170H vs. +135H a week ago.  Shouldn’t be a lot of resolve in betting against futures when both basis and spreads are rallying in tandem.

 

Bottom Line: Our markets are mixed on the week, so choppy trade heading into the weekend wouldn’t surprise.  Keep in mind, depending on how the Brazilian Real finishes the day, the soy complex could see some hedged pressure from the South American growers ahead of the long-weekend.  Grains are slowly generating a story for next year, and the demand signals for 14/15 are proving ample enough.  Soybeans still appear to be the market with the most to lose.

 

Good Luck Today.

 

CPC 6-10 2-13 CPC 8-14 2-13

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

 

2/12/2015 Morning Comments

Good Morning,

 

Outside Markets as of 5:50am: Dollar Index down 0.3150 at 94.6720; Euro up 0.00340 at 1.13410; Canadian Dollar is up 0.71% at 0.79580; S&P’s are up 8.00 at 2073.75; Dow futures are up 69.00 at 17,901.00; 10-yr futures are down 0.28%; The Nikkei closed up 1.85% at 17,979.72; The DAX is up 1.61% at 10,925.69; The IBEX-35 is up 1.93% at 10,564.90; Gold is up $4.90 at $1224.50; Copper is up $4.45 at $258.55; Crude Oil is up $1.28 at $50.12; Heating Oil is up $0.0255 at $1.8396; Paris Milling Wheat is unchanged at €185.75/MT.

A ceasefire was agreed to end weeks of intense fighting in eastern Ukraine after all-night talks between leaders from Germany, France, Ukraine and Russia.  The accord was struck after 18-hours of non-stop negotiation, putting into place the ceasefire beginning February 15th.  The IMF also announced early Thursday, Ukraine will receive a $40 billion bailout package to stave off default.  This didn’t seem to help the Ukrainian Hryvnia which jumped another 2.69% today to 26.7000:1 against the US Dollar.  The Russian MICEX equity index rallied 2.47% on the ceasefire news.

The weekly EIA energy inventory report did not disappoint this week, seeing crude oil rise by another 4.87 million bbls to 417.93 million, another new record going back to 1982.  Inventories are now 15.6% above a year ago, and 16.8% above the 3-yr average.  The inventory building isn’t likely to slow anytime soon, considering the EIA showed in their latest drilling productivity report that crude oil production should rise over 66,000bbls/day during the month of March.  Crude spreads are certainly confirming the larger inventories and set back in flat price with CLH/CLJ dropping to -0.95c yesterday, the lowest on a closing basis in the contract’s history.  Would seem bottom pickers will be fighting an uphill battle for the foreseeable future, and the Congressional Budget Office sees crude oil prices falling well into 2016.  This will undoubtedly be a negative undertow for Ag prices in a general sense.

The Brazilian Real fell to a fresh 10-yr low yesterday of 2.9116, and was the lowest on a closing basis since November 2004.  Analysts are expecting zero growth for Brazil in 2015, and state-owned oil company Petrobas remains roiled in scandal.  The company was valued at $310 billion in 2008, making it the world’s fifth largest company, but now has a valuation of $48 billion thanks to recent corruption scandals.

Extended maps from NOAA last evening suggested the cold temps in the east overtaking the above normal temps in the west as a cooler bias blankets almost the entire country by the middle of next week.  Important will be how cold the temps actually get, and what the degree of snow cover is during the cold snap, especially as some of the HRW has broken dormancy with the well above normal temps from last week.  According to Commodity Weather Group, the concern area for the cold snap will encompass about 6% of the soft red wheat acreage and 9% of the hard wheat acreage, or around 7% of the national winter wheat crop.  An important piece to remember is this is February 12th, not March 12th.  Each time we go through a massive temperature swing like this, the wheat seed loses more of its winter hardiness, leaving it susceptible to full winter-kill.

 

Better markets this AM across the Ag sphere as most of our contracts appear to be trading inside triangle formations, which could be pre-empting a breakout in one direction or the other.  Based on the direction of trade before the consolidation period began, it would suggest soybeans are readying for a breakdown while corn and wheat are preparing for another leg higher.  Cash soybean trade is supporting the soy complex as the transition to SAM supplies is proving less than smooth, while weekly demand figures for corn continue to suggest strengthening demand.  The wheat market is likely gaining some traction on the looming cold snap, and combined with well-known conditions in Russia and Ukraine, is likely enough for bears to give pause.  Export sales on tap this morning with corn and wheat sales in focus to prove their updated export figures.

CIF NOLA soybean premiums have been on the move this week, trading especially firm for ETA slots (+95H) as well as for Feb and Mar (+85/80 & +72H, respectively).  There seems to be a couple of factors present supporting the firm basis; to wit, cheap ocean freight, and a delayed Brazilian soybean harvest due to slow planting last fall.  The aforementioned basis combined with applicable barge freight is putting Zone 3 cash 4.5-18.5c above gross delivery equivalence, which is rallying SH/SK to boot.  At the highs yesterday, the SH/SK rallied to -2.25c, the highest trade since June 27th.  Normally, strong premiums combined with strong calendar spreads should beget a futures rally.  This time, however, it doesn’t feel as though soybeans have an upside function to perform given the calendar constraints before Brazilian soybeans take the reins.  Also, the Brazilian Real dropping to a 10-yr low will continue to promote farmer replacement sales, even if the US farmer holds tight to his remaining supplies.  It looks as though exporters are taking advantage of freight parity to cram a few extra boats in before the door closes.  Any further delays to Brazilian shipping, and well then we can talk.

Weekly ethanol production surprised a bit with a bump in production to 961,000bbls/day, up 13,000bbls/day and above the new “needed” level of 930,000bbls/day.  Ethanol stocks rose by 149,000 bbls to 21.135 million bbls, the highest since June 2012.  Weekly gasoline demand continued to plummet, however, dropping for the 3rd straight week, and falling below the corresponding week from 2014.  Weekly gasoline demand since the beginning of the 14/15 corn marketing year has been averaging 2.3% above a year ago, while ethanol production is averaging 5.7% above a year ago.  Ethanol exports are obviously playing a role, with Sept-Dec exports up 16% y/y, but ethanol stocks since the beginning of January are up 17%.  Continued ethanol exports will be needed to prevent a glut of ethanol should gasoline demand continue to drop.

Wheat spreads continue to be a focus with front-month calendars rising to the strongest levels in weeks yesterday.  The WH/WK jumped to +2.75c yesterday, the firmest trade since April 1st, 2014, while the MWH/MWK firmed to -0.50c, the highest trade since 5/15/14.  The MWK/MWN also jumped to the highest level since 12/18.  Basis bids could be called steady/better, but nothing alarming.  CIF NOLA SRW bids firmed by 4c to +85H, getting back to where they were last week.  HRW export bids are unchanged, although the spot floor bids were up by 4-8c yesterday.  No real change to HRS or DNS bids to speak of.  I want to continue respecting the firm calendar spread trade in regards to flat price, until or unless basis breaks.  The quality trade within our wheat markets has been apparent for some time, and could be the impetus for the spread rally.  Still, the shift in ownership from the funds over to the commercial end user, without any corresponding sales from the farm gate level, keeps me from betting bearish wheat in the near-term.

Export sales estimates put wheat at 300-650TMT, corn at 600-1,100TMT, soybeans at 300-550TMT, meal at 150-300TMT and soy oil at 10-20TMT.

 

Bottom line: Our markets are consolidating into rather tight ranges which could be warning of a breakout in the coming sessions.  Corn is proving the demand it needs to, the transition to SAM supply has been uneven at best and the wheat market has to deal with another cold snap in the US.  Traders are anxious to look ahead to 15/16, and next week with the USDA Outlook Conference, they’ll get that chance.  New crop corn supplies aren’t as plentiful as many would think unless we have 90 million acres and a 166bpa+ national yield.

 

Good Luck Today.

 

CPC 6-10 2-12 CPC 8-14 2-12 Snow Cover 2-12

 

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

 

 

 

2/11/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:30am: Dollar Index up 0.0370 at 94.7940; Euro up 0.00020 at 1.13190; Brazilian Real off 1.02% to 2.8649; S&P’s are down 2.50 at 2059.75; Dow futures are down 29.00 at 17,764.00; 10-yr futures are up 0.11%; The Nikkei closed down 0.33% at 17,652.68; The DAX is down 0.32% at 10,719.00; The IBEX-35 is down 0.84% at 10,412.20; Gold is up $2.70 at $1234.90; Copper is up $2.00 at $257.15; Crude Oil is down $0.14 at $49.88; Heating Oil is down $0.0128 at $1.8199; Paris Milling Wheat is down €1.25 at €183.75/MT.

Greece continues to make headlines as their bailout is set to expire at the end of February, causing political leaders to scramble to find a solution or spark another round of secession talk.  In the East, President Putin will travel to Minsk to negotiate a truce in Ukraine as Russia signaled a deal is likely and France said discussions are focused on the degree of autonomy for rebel-held eastern regions after 10-months of fighting.  The weekly EIA report is due later this morning and traders are looking for a +3.75 million bbl rise in crude oil inventories, a 500,000 bbl decline in gasoline inventories and a -1.5 million bbl decline in distillate inventories.  The EIA’s latest drilling productivity report suggests crude oil production will continue to rise in March, despite drilling rigs being at the lowest level since December 2011, highlighting the productivity gains as old wells come offline.

Looks as though the upturn in moisture suggested by NOAA’s extended maps will take place according to the 7-day forecasted precip map below.  Early to mid-next week will see shower and possibly snow activity increase in the southern plains up through the OH-River Valley.  The continental divide of temperature remains in place during the 6-10 and 8-14 with above normal out west and below normal temps out east.  Moisture chances will drop for the Great Lakes in the 8-14 while the southern plains should continue to see precip chances.

 

Lower overnight markets throughout the evening sessions following weaker closes in all of our markets after the February WASDE report was released.  Traders had a difficult time making up their mind in the 60-minutes following the report’s release, but lower closes were definitive by 1:15pm CST.  The report didn’t really offer any game-changing statistics as pre-report estimates suggested, but carryouts did tighten for corn and beans more than the average trader thought.  At the end of the day, however, global inventories of corn, wheat and soybeans remain plentiful if not burdensome, and this will not materially change until we get into spring planting in the Northern Hemisphere.  The data was not enough to attack our lower boundary, but recent highs might be safe until at least the February Outlook reports. Cash and spreads will once again take center stage in the tug-of-war for supply.

Starting first with corn, the USDA cut feed/residual demand by 25mbu to 5.250bbu, a surprise move to many considering the USDA updates quarterly stocks, and therefore implied feed/residual demand, next month.  Rarely do they take such a move, but their 75mbu increase in ethanol demand for corn to 5.250bbu implies more DDGs production displacing corn in feed rations.  I have an issue with this logic considering at the Gulf this week DDGs are commanding a $70-90/MT premium to whole corn as DDGs exports to China have ramped back up.  DDGs prices have been slowly closing the gap to corn over the last month, but still demand a premium for the by-product itself.  One can also bet that since feed/residual and ethanol demand for corn are equal we will hear the food vs. fuel debate ramp up slightly.  Ethanol production has been running well better than the levels needed, so an increase was certainly warranted, but whether a 75mbu increase was necessary will be apparent in the weeks to come.  Weekly ethanol production is on tap at 9:30am this morning.  Exports were left unchanged to bring ending stocks down to 1.827bbu vs. the average trade guess of 1.879bbu and 1.877bbu previously.

Where the corn balance sheet becomes interesting when plugging in 14/15 ending stocks of 1.827bby is on the 15/16 balance sheet.  Using 88 million planted acres and a trendline yield of 166bpa, production comes in around 13.433bbu for a total supply of 15.286bbu.  Assuming modest growth of 1.5% in feed/residual, unchanged ethanol demand and exports bouncing back to 1.900bbu like 13/14, carryout drops to 1.400bbu, or 10% stocks/use.  The point being, anything less than trendline yield this coming growing season could plunge us right back to a sub-10% stocks/use ratio, which would be historically tight.  Given the aforementioned, corn isn’t likely to challenge recent lows, and should try to buy back a few acres for extra cushion.  Corn has the least ending stocks margin, and will draw the most scrutiny this coming growing season.

On the world front, Ukrainian exports were raised 1.5MMT, Argentine corn production was raised 1MMT with exports raised 1.5MMT and global ending stocks were increased 0.4MMT to 189.6MMT.  Plenty of competition for US old crop corn exports in the weeks ahead.

On soybeans, ending stocks came in at 385mbu, below the 398mbu average trade guess and well below the 410mbu from last month.  Imports were increased 10mbu, crush increased 10mbu and exports raised 20mbu for a total use increase of 35mbu.  The increase to crush was a bit of a surprise considering crush is running at 1% below a year ago through December, and the USDA now expects crush to finish 3.5% above a year ago.  This as hog crush margins have plummeted to near 2-yr lows, SAM meal exports are ramping up, and soybean basis has dropped over the last 3-months.  The increase in imports was also a bit odd considering the heightened supplies this marketing year, although the combination of cheap ocean freight and weak Brazilian and Canadian currencies could steer a few more beans towards the US-SE and OH-River Valley.  Global changes saw Brazilian production cut 1.0MMT to 94.5MMT from last month but Argentina increased 1MMT to 56.0MMT.  Neither country saw exports rise from last month’s combined 54MMT.  Chinese soybean imports were left unchanged at 74MMT and global ending stocks were reduced 1.5MMT to 89.3MMT.

Peaking ahead to 15/16, it’s difficult not to paint a bearish outlook given the general consensus for increased acreage, even though this analyst doubts acreage as high as 87-88 million will occur.  Using 86 million planted acres with a 45bpa trendline yield provides a total supply of 4.220bbu, up from this year’s 4.086bbu total.  Assuming 1.5-2.0% growth in both crush and exports for next year leaves us with ending stocks of 455mbu vs. this year’s 382mbu.  Stocks/use would rise to 12.0% and be the largest since 2007.  Would should realize this is a much more conservative view of next year’s crop than many in the market are currently painting.  Several well respected analysts have soybean carryout for next year rising above 600mbu.  Plenty of weather to get through yet, but soybeans are going to be shooting behind the 8-ball until weather adversity develops.

Fairly quiet day for wheat as expected with imports cut 20mbu and exports cut 25mbu to increase ending stocks by 5mbu to 692mbu.  The cut to imports was long-overdue as Canadian exports of wheat to the US through December were down over 50% from 13/14.  We did import several cargoes of European feedwheat, but nowhere near enough to make up for the Canadian shortfall.  How the weak Loonie influences trade in 2015 will be a focus.  Difficult to argue with the cut to wheat exports given the abysmal picture to-date even if sales have improved in recent weeks.  US wheat exports of 900mbu would be the weakest since 2009/10 and the third smallest program since 1980/81.  By-class changes were a bit more interesting with HRW exports cut 20mbu, SRW cut 10mbu, durum cut 5mbu, and HRS exports up 10mbu  Global changes included Australian exports being cut 0.5MMT to 17.0MMT from last month while Argentine wheat production was increased 0.5MMT to 12.5MMT and exports rising to 6.5MMT by the same amount.  Global wheat ending stocks rose to 197.9MMT, up 1.9MMT from last month and up 10MMT from a year ago.

The weekly deliverable stocks report showed draws in SRW and HRW stocks to the tune of 1.13% and 2.75%, respectively vs. a week ago.  HRS deliverable stocks rose by another 500,000-600,000 bushels, and are a solid 7-8mbu above a year ago which should be putting more pressure on spreads, although quality considerations are present this year.  Corn basis went home with minimal changes at the Gulf yesterday, although PNW premiums continue to inch higher with a reported trade of +110H.  Bids went home last night at +107H vs. +115H offers.  Calendar spreads of all the commodities are trading firmer this AM, bucking the lower futures trend.

Ethanol at 9:30am.

 

Bottom Line: The trade got the numbers it wanted, if not a little better, but funds still seem to be in liquidation mode or interested in building larger short positions.  Keep in mind the massive shift in ownership we saw on last week’s COT data, and the likelihood this trend is still continuing.  Spreads are bucking the weaker futures trend, and I will continue to take my cues from cash and spreads.

 

Good Luck Today.

 

HPC 2-11-15

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.

 

 

 

 

2/10/2015 Morning Comments

Good Morning,

 

Outside Markets as of 6:20am: Dollar Index up 0.2020 at 94.6400; Euro down 0.00160 at 1.13250; S&P’s are up 12.75 at 2055.00; Dow futures are up 99.00 at 17,780.00; 10-yr futures are down 0.29%; The Nikkei closed down 0.33% at 17,652.68; The DAX is up 0.60% at 10,727.84; The IBEX-35 is up 0.96% at 10,464.10; Gold is down 0.43% at $1236.20; Copper is down $4.90 at $253.15; Crude Oil is down $0.47 at $52.40; Heating Oil is down $0.0097 at $1.8632; Paris Milling Wheat is down €1.25 at €186.00/MT.

Greece continues to grab financial headlines this morning s they try to gather support for a bridge gap funding plan, but Germany has been unwilling to compromise on conditions attached to Greece’s bailout.  The Ukraine/Russia conflict also remains on the front-page as President Obama mulls the decision of whether or not to arm Ukraine.  He has confirmed military aid was being considered, but France and Germany are opposed to arming the embattled nation for fear of dragging out the conflict longer.  The EIA reported in its monthly drilling productivity report yesterday that US oil production will grow in March by 66,648 million bpd, which would be the lowest growth in over a year, but still growing m/m.  The sharp drop in oil rigs has only slowed the pace of US oil production growth, but has not yet contributed to a production decline.  Technology and productivity gains are keeping oil production supported.

A wintry mix is moving across the Dakotas and S-MN this morning, which should keep grain movement slow.  The up-turn in moisture is being welcomed with open arms in the upper-Midwest where the drought monitor has expanded over the winter.  7-day forecasted precip keeps moisture heaviest over the Great Lakes.  Extended maps from NOAA keep temperature trends in place with everything west of the Plains corridor seeing above normal temps and everything east of their locked in below normal temps.  Moisture trends are improving as indicated on the maps below, but no concentrated effort in either the 6-10 or 8-14 day.

 

Slightly easier markets this morning following the decent performance yesterday.  Several of our markets are posting interesting technical formations, ranging from the flagging action on soybeans to the inverted head and shoulders pattern on corn.  The market will focus on the updated USDA Supply and Demand report at 11:00am CST this morning, even though market moving changes are expected to be limited.  Still, almost every USDA report offers the market at least one surprise, and there are several which could take place depending on how aggressive the USDA wants to be in front of the March 31 Quarterly Stocks report.  This will also be a consideration with the February Outlook Conference a week from Friday with the first glance at the 15/16 US balance sheets.  Still retaining a sideways/higher bias on corn and wheat with a sideways lower bias on soybeans.

The average trade estimate on corn ending stocks is 1,879mbu vs. 1,877mbu last month, or essentially unchanged due to rounding.  Best odds for a change on the corn balance sheet would be an increase of 10-25mbu to corn demand for ethanol from their current 5.175bbu target.  Weekly ethanol production has averaged higher than the needed level each week for the past 15-weeks in a row, strongly suggesting the USDA has been light on their demand estimate.  However, production declined notably last week, and margins have come under serious pressure with oil’s demise.  Still, ethanol production should be increased given YTD progress up 4% from the needed pace and 5.5% higher than a year ago through January.  Export sales are likely to receive a punt this week given sales have averaged good enough to hold serve but inspections continue to run a bit light.  The increased competition from Ukraine in recent weeks could also temper the USDA’s resolve for moving the export needle.  Feed/residual should be held steady ahead of the March stocks report.  Unchanged to ending stocks lower by 15-25mbu looks likely but has possibly been priced in over the last week.

Soybean ending stocks are seen at 398mbu vs. 410mbu last month as exports continue to run better than the pace needed for the current USDA estimate.  Total commitments for the marketing-year-to-date account for 94% of the USDA’s marketing year forecast, a new record for early February.  Shipments have also been strong and better than needed.  However, Brazil and Argentina have strong crops coming and discounted prices from current US replacement.  This may give the USDA pause for increasing their current 1,770mbu estimate, even though cash traders report Brazil being unwilling to sell soybeans for export until LH-Mar.  How long the US program hangs on will be the best indicator as to final soybean exports.  Crush-to-date is down around 1% from a year ago while the USDA’s estimate reflects a 2.7% increase y/y.  Meal export sales remain strong as to cash crush margins.  I see no reason to tamper with the estimate this month.  SAM production estimates will be a focus with Brazil estimated at 94.7MMT vs. 95.5MMT last month while Argentina is seen at 55.6MMT vs. 55.0MMT and private estimates as high as 57MMT last month.

Wheat ending stocks are estimated at 689mbu vs. 687mbu last month with the only changes expected to come from the export estimate.  Wheat’s export estimate has been under fire for months now, running well behind the pace needed to hit the USDA’s estimate.  Sales have picked up the last 3-4 weeks, however, although shipments continue to lag.  Total commitments are down 24% from a year ago while the USDA is only calling for a 21% decline y/y.  More concerning is the fact export shipments are down 31.0% from a year ago with only 16-weeks remaining in the year.  Export shipments haven’t hit the level needed in 16-weeks also, keeping the gap to close large. Traders are not anticipating a cut to exports based on the average trade estimate, but one is certainly a possibility.  Global changes could see Australian production cut by another 1MMT to 22MMT, while EU exports could be increased.  Global wheat stocks are still going to be above last year and more than plentiful.  Any bullish implications for the wheat market will be based on Northern Hemisphere conditions when the winter crop emerges completely from dormancy.  In the US, this is already occurring as far north as SD which is a concern.

Export inspections data yesterday was a bit disappointing for grains but strong for soybeans.  Wheat exports of 14.6mbu was below last week’s 15.3mbu and below the 20.2mbu needed to hit the USDA’s export forecast.  Corn shipments were 27.6mbu, below the 34.7mbu needed to hit the USDA’s export forecast and missing the level needed for the 16th week out of the last 17.  Cumulative exports total 616.8mbu, up 2.3% from a year ago, but some big shipments occurred in 13/14 the next 5-6 weeks.  Soybean shipments totaled 54.6mbu, blowing away the 11.5mbu needed weekly to hit the USDA’s export forecast with total shipments running 17.7% above a year ago.  The USDA’s current export estimate implies a y/y increase of 7.4%.

One more note on spreads, wheat spreads made new highs for the move in several contracts, adding credence to the strength in flat price the last week.  The WH/WK hit +0.50c yesterday, the highest trade since 12/18 with heavy volume thanks to ongoing GSCI roll.  The MWH/MWK hit -1.50c yesterday, the highest trade since May 2014 before easing overnight.  Interestingly enough, basis bids didn’t firm to any notable degree yesterday, although reported offers were up by 5-6c at the Gulf.  The increased inquiries for US wheat in the last week, along with the well discussed quality issues in the US-SRW, will keep the meager supplies of quality milling wheat at a premium.  Cash basis along the OH-River Valley is now 28-35c above gross DVE for #1-SRW in February vs. 21-29c above a week ago.  March slots are 30-37c above DVE vs. 25-32c above a week ago, so complexion is definitely firmer.

 

Bottom Line: Let’s get the USDA report out of the way so we can go back to monitoring cash and spreads.  Likely to be some headline risk, although grains don’t appear ready to give back their hard work of the last week over the February WASDE.  In the larger picture, soybean supplies in both the US and globe are plentiful, and grains are dependent upon spring/summer weather for moving outside of current ranges.  Respect the trend.

 

Good Luck Today.

 

6-10 Precip 2-10 8-14 Precip 2-10

 

Tregg Cronin

Market Analyst

Tregg.Cronin@halocommodities.com

www.halocommodities.com

@5thWave_tcronin

 

 

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECEIPIENTS OF THIS EMAIL. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email 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.