Morning Grain Comments, 05/02/2016

Monday, May 02, 2016


It turns out managed money traders flipped from a large (- 175k) net corn short to a substantial l (+75k) net long in three weeks; that was good for just over a quarter’s worth of gains during that time. Analysts expect a decent corn planting number this afternoon and big progress this week...

Bangladesh rejected 50k tonnes of Russian wheat on quality concerns, just two weeks after they rejected two shipments totaling 100k for the same reason

Saudi Arabia bought 620k tonnes of international l hard wheat for July-August.

The European Commission raised their wheat ending stocks for both 2015/16 and 2016/17, by about 600k tonnes each, to 18.3 and 18.9 MMT, respectively.

Private ana lysts AGR Brazil on Friday cut their 2015/16 corn crop forecast from 85.1 to 79.6 million tonnes, with second-crop production obviously losing the bulk of that (down 5.5 MMT this month to 52.1 MMT). Analysts Franca Junior a lso cut their ‘15/16 BRZ corn number from 87.1 to 79.5 MMT Friday, with soybean output down from 99.5 MMT in March to 98.1 MMT.

Argentine customs data showed the country’s corn exports at 7.6 million tonne in January through Ma rch, double the amount from Q1 2015.

This afternoon’s USDA Fa ts & Oils Report is expected to show March soybean crush at 4.966 million short tons, or 165.5 million bushels, up from 154.6 mbu in Feb and the March NOPA number at 156.7 million bushels.

Friday afternoon’s Disaggregated CFTC Report showed a massive 104k net corn contract gain by the managed money funds on the week ending la st Tuesday (4/26), compa red to trade expectations for a 12k net loss on the week; daily estimates were similarly off for the rest of the grain complex where funds added up to 24k net on the week. Producers and merchants sold a 78.6k net on the week, with beans and mea l down 28-29k each, oil down 9.6k net, Chicago wheat down 6.3k net, and KC wheat down 14.4k net to 4/26.

CBOT May Deliveries: corn zero; soybeans 171 contracts with next trade date 4/21; bean oil 2,851 & 4/28; Chi wheat 544 & 4/29; KC wheat 761 & 4/29.

 

Today’s cha rt is a seasona l of the July-NovCBOT soybean spread, including recent years and the 3 and 5-year averages. Since the Nov ‘15 contract went off the boa rd, the spot 2016 N-X spread traded in just over a seven-cent range (all just below even) until April 20th, when it flipped from a 1 1/4-cent carry to a 19 1/4-cent inverse. Volatile action in the last week and a ha lf still leaves the spread in line with last year at this point, which peaked at +35 cents in mid-June.

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