Kleist Comments

MORNING GRAINS 2/21/14
MORNING GRAINS 2/21/14

Corn:

Exports: None Visible.

Comments: USDA S/D: The highlights of this intellectual treat included—domestic use up 130mln.bu. but exports fall 50mln.bu. with production up 60mln. to 13.985bln.bu. (ethanol unchanged)/all this on planted acres down 3.4mln.acres and harvested off 3.1mln./ BUT THE NUMBER THAT WILL RECEIVE THE MOST SCORN AND MINUTIA DISECTATION is the yield at 165.3bu./acre up 6.4bu. on yr. Hence, a bearish report but we’ll say it first: it’s a long way from the report to the harvester and weather needs to be near-perfect.

Weekly sales fell 46% to 6912,400t with Japan at 454,100t (with 156,000t switched from Unknown), and also Unknown cancels 127,500t, China cancels 18,800t (one and the same?); shipments fell 22% on week (logistics?). Open interest rose 6,600 even as March falls 23,700 amid big volume. Neutral but expecting a reversal fundamentally perhaps.

SOYBEANS:

Exports: None Visible.

Comments: USDA S/D: A funny thing happened on the way to the Forum: corn loses 3.4mln. acres and soybeans find 3mln. and talk is some several mln. acres are not accounted for; nonetheless, production seen up 260mln.bu. at 3.550bln. with the carryover 285mln.bu. up 135mln., but the higher crop meets higher demand: exports up 9mln./crush up 25mln. and then imports down 15mln.bu.; Yield? 45.2bu./acre up 1.9bu. on yr. Considering what comes out of South America’s crops, a bearish report. BUT of course all still a twinkle in the bear’s eye.

Weekly export sales to a marketing year low of 86,700t (rationing works?) includes cancellations by our favorite guys Unknown (268,500t) and China (145,600t); new crop sales 749,100t; meal sales jumped back to 227,500t and soyoil fell 70% to just 11,700t (no wonder soyoil open interest has been peeling off sharply lately). Yesterday’s Open interest rose 7,100 even as March drops 17,300 and the ‘battle’ rages (still believe it’s a change of ownership), volume strong.

Neutral but not a believer in this latest bull argument.

Wheat:

Exports: None Visible.

Comments: USDA S/D: carryover 587mln.bu. up 29mln. on yr., production rises 20mln.bu. even as yields fall 1.4bu./acre with planted acres down! 700,000 and harvested acres up! 200,000. Exports decreased by 125mln.bu. and domestic use lowered by 53mln., carry-IN dropped 29mln. and imports down 50mln., feed use lowered 60mln. (remember corn feeding raised 100mln.). Bearish report but a long way to go obviously.

Weekly export sales fell 29% to 424,500t and shipments at a marketing year low; open interest fell another 3450 led by March off 21,100 amid heavy volume. Same as above thinking.

Let us see if something changes it.

Kleist Comments

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

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