Kleist Comments

MORNING GRAINS 10/10/13
MORNING GRAINS 10/10/13

Corn:

Exports: None Visible.

Comments: No weekly export sales, no S&D report tomorrow, no C-O-T report tomorrow….what’s a Mother to do? Well in this ags of “Al-Gore-ism’s” most of us fundamentalists are forced into charts anyway. But fundamentalists not extinct just yet. Just need food. Rumor has it China bought 500,000t U.S. corn last week and I say futures action cold back that up; speaking of China: northeast some rain-delayed harvests, central sees a rapid warm up and drier and good for mature corn and harvesting; in the bible somewhere: man cannot live by ethanol alone (i.e. this rally helped by but certainly NOT caused by that ethanol report yesterday); open interest little changed in total with December off 4,400 but added on in light numbers across the H/K/U/Z’14 contracts amid light volume. Hence I would not trust the break just yet. Not being in the middle of harvest likely why $4.50 a tough price to get through. At some point all that new long fund open interest UNDER the market will need to be addressed. While I am using long call options for now, for futures a close under $4.39 a bull warning flag.

SOYBEANS:

Exports: None Visible.

Comments: November beans acting well considering once the break ran its course and saw weak longs run like lemmings (I know the feeling!), it keeps knocking on the door of $13.00’s and has opened it a crack (and is 3x’s a charm?). China underneath our new crop sales again? Resumption of harvest not enough to keep pressure under recent lows so demand must be keeping it afloat; in Brazil: plantings to begin in north as rains allow, southern areas OK for early season field work; India: severe cyclone to hit Saturday, winds to 175-185kph; Malaysian palm oil stocks end of Sept. up 7% on month with production up 10.2% and exports up 5.2% (competition vs. soyoil); soyoil deliveries 119; China futures: higher beans and mixed corn; open interest rose 1500 even as November fell 14,500 (roll to Jan. up 12,900?) amid relatively strong volume. Maintain long calls as hedge protection for now; in futures a close under $12.80 a bull warning flag.

Wheat:

Exports: None Visible.

Comments: In other news: blame it on the Bosa Nova…..er….the government shut down for the jump in unemployment claims; Around the world in 80 days: E.U. western areas warmer/dryer for plantings and early growth, in eastern areas cool/cold/wet sees planting delays and spring wheat harvest delays; Russia/Ukraine rains and cold still delaying some plantings; Argentina major southern areas gets needed rains, more needed north; China no major winter planting concerns; India/Pakistan no major planting concerns currently. Open interest rose 2,000 led by December up 1,740 amid very light volume. Perhaps I should just consider $6.99-3/4 close enough to our $7.00 objective and be done with it for now.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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