Kleist Comments

MORNING GRAINS 3/11/14
MORNING GRAINS 3/11/14

Corn:

Exports: None Visible.

Comments: You know, for all the meat-bull talk of coming hog number collapse (PEDv) and historically lower cattle numbers, no one talks much about how that will effect feed demand. I think it will….significantly and March’s Quarterly grain stocks might be a negative surprise (feed use unchanged on yesterday’s USDA report….one side of the equation then is wrong); also, March 31st is the Planting Intentions report. Speaking of which, wonder if its just a question of time before the talk of planting delays do to flooding as record snow melts in some areas and other areas get too much rains? It’ll happen, set your clock to it. When exactly the problem to us. Nonetheless, there seems good reason the highs are in for the now IF importers back off which I expect them to do. Open interest fell 1300 led by K/N off 6200 and Sept. up 4250 amid good volume.

SOYBEANS:

Exports: None Visible.

Comments: China weak trade data showing up on imports of beans? I mentioned yesterday that rumors are flowing about China cancelling BRAZIL beans, an unusual situation to say the least. Reasons as mentioned here were port congestion and lowered crush demand as pork/poultry farmers contract herds. A second source now says China might have cancelled up to 15 cargoes of Brazilian beans; as to the USDA report yesterday, it is evident we will not run out of beans and the bull’s new Achilles heal is IMPORTS (we talked about a lowered crush), all things being equal. But not all things are equal maybe as China could still cancel a chunk of U.S. beans. So you say, but didn’t yesterday’s break already discount all of the above? Doubtful. Technically the ‘major trend’ is up, fundamentally it is down. At least until the next (generally manufactured) scare. In other news: Canada’s largest port see a bulk ruck handler strike (any body going to say “that means demand for PNW beans will rise!); deliveries 12; open interest rose 4,200 led by May/Nov. amid strong volume. By the way, May soymeal stills looks like a classic “distribution top” on my charts.

Wheat:

Exports: None Visible.

Comments: The USDA report was neutral per se but the world numbers suggests supplies are still ample. I only agree with the concern over the Ukraine/Russia crisis that could limit exports out of those countries if things escalate. But it will be TEMPORARY problem as importers just source their needs to other, maybe albeit more expensive, suppliers. NASS raised crop conditions Tx./Ks. and lowered OK by 9%; open interest little changed in total amid moderate volume.

Kleist Comments

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

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