Download Report

Closing Grain & Soybean Comments
Kevin Riesberg Monday October 27, 2014
CORN: Corn was a follower of the surging soymeal and soybean market today with only limited farmer selling
seen on the rally. The futures rally did cause corn basis levels to soften 2-5 cents depending on the location in
the Midwest. Harvest progress at 46% was almost dead on with the expected 45% complete this afternoon.
8/2/2013 - 12/5/2014 (CHG)
Price
USc
Bsh
Weekly Continuous Corn chart w/ 8, 26, and 72 MA
Weekly 1Cc1
BarOHLC, 1Cc1, Trade Price
10/31/2014, 3513/ 4, 3633/ 4, 3481/ 2, 363, +10, (+2.83%)
3MA, 1Cc1, Trade Price(Last), 8, 26, 72, Simple
10/31/2014, 3391/ 4+, 390+, 4453/ 4+
540
100.0% 520 5/8+
510
480
61.8% 443 1/4+
450
50.0% 419 3/8+
420
38.2% 395 3/8+
390
23.6% 365 3/4+
360
330
0.0%
318+
1/8
02 16
06 20 04 18 01
22 06 20 03 17
Q3 2013
Q4 2013
07 21 07 21 04 18 02 16
06 20 04 18 01
22 05 19 03 17
07 21 05
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Private crop estimates are to start rolling out next week in front of Nov 10th USDA report with traders expecting
only minor bumps in the national corn yield. Weekly export inspections were less than expected at just 27.6 mln
bu but that didn't slow the market down. Fresh export news for US corn is lacking but right now the focus is not
on demand but rather money flow and lack of producer selling into the pipeline. Ethanol values surged back
today after the break late last week. DDG values should see support from the surging soymeal and canola values.
Dec/March corn spread continues to hover near 13 1/2 cents with Goldman roll still 2 weeks away. Corn remains
a follower for now of meal and beans until we get to the last 30% of harvest.
SOY-COMPLEX: It was all about the soymeal market today as it exploded higher and triggered technical buying
6/12/2014 - 12/1/2014 (CHG)
Price
USD
STn
Daily 1SMZ4, /RSX4
Dec Soymeal futures
380
370
360
350
340
330
320
Nov Canola futures
310
300
Auto
16
23
30
June 2014
07
RJO’Brien
14
21
July 2014
28
04
11
18
25
August 2014
02
08
15
22
29
September 2014
06
13
20
27
October 2014
Service is our trade
03
10
17
24 01
November 2014
in soymeal and
soybeans.
Reasons behind
the meal rally
range from
continued freight
issues of moving
meal to end users
to concern about
low protein
content of US
soybeans. Canola
futures also
following the rally
in soymeal, see
1|Page
chart. US farmer selling of new crop soybeans was limited even with the rally today (country elevators indicate
producerss are holding out for $10.00 cash). Some cash markets did slip basis back 3
3-7
7 cents on bean basis but
generally held up well considering the movement in the futures. Harvest progress tonight came out at 70%, right
in line with
expectations of
70-75% complete
with the clear
weather this week
to allow many
areas to finish up
by end of this
week. (US
soybean export
inspections were
much bigger than
expected at 80.6
mln bu. In the
last 2 weeks the
US has shipped
out a whopping
155 mln bu. Out
of South America
selling from
producers remains strong now that the Brazilian presidential election is out of the way and weather forecast has
improved rain/planting conditions in Northern Brazil. Nov beans have now seen almost 50% retracement rally
from the July to September break, see chart. While some follow through technical buying is expected tomorrow,
it should start to see increased farmer selling. Meal remains the key market to watch for
f now.
WHEAT:: Wheat market was higher as it followed corn and soybeans with today's action was mostly technical in
nature. Chicago wheat leading the 3 exchanges
xchanges as chart of KC/Chicago spread shows it has given back almost 15
cents/bu. Spec funds continue to exit their short wheat positions as technical picture im
mproves. Weekly export
inspections were pathetic at just 7.8 mln bu but this didn't ma
matter
tter to the trade. European wheat futures were
lower early but then rebounded as it follow
followed Chicago's rally. HRW basis was steady to mixed today with freight
car values moving higher. Trade ignored that 2 cargoes of British feed wheat are to load for the US soon
so (first
imports of
Daily 1KWZ4, 1WZ4
6/9/2014 - 11/3/2014 (CHG)
European feed
Value
Spread, 1KWZ4, Trade Price(Last), 1WZ4, Trade Price(Last), 1.0, 1.0
wheat in over 2
USc
10/27/2014, 72
Bsh
years). Trade is
110
still nervous about
KC/Chicago wheat spread - Dec
105
bitterly cold temps
in parts of Russian
100
winter wheat areas.
Not much fresh
95
news out of
90
Australian wheat
harvest over the
85
weekend. So for
80
now look for wheat
to remain a follower
75
of beans and corn
1/8
for now. Have a
09
16
23
30
07
14
21
28
04
11
18
25
02
08
15
22
29
06
13
20
27
03
good afternoon!
June 2014
July 2014
August 2014
September 2014
October 2014
RJO’Brien
Service is ou
ourr trade
2|Page
RJO’Brien
Service is our trade
3|Page
This material has been prepared by a sales or trading employee or agent of R.J. O’Brien and is, or is in the nature of, a solicitation. This material
is not a research report prepared by R.J. O’Brien’s Research Department. By accepting this communication, you agree that you are an experienced user of
the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in
making trading decisions.
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS
COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR
RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS
ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS
COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable
investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading
advice is based on information taken from trades and statistical services and other sources that R.J. O’Brien believes are reliable. We do not
guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment
at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.
RJO’Brien
Service is our trade
4|Page