Kleist Comments

MORNING GRAINS 6/27/13
MORNING GRAINS 6/27/13

MORNING GRAINS 6/27/13

Corn:

Exports: So. Korea buys 55,000t Brazil.

Comments: 1st notice day tomorrow, check your positions gentlemen; Brazil says winter corn crop harvest beginning, some rain delays; North Africa grain production seen up 17% on year, will limit imports; USDA reports: read where in the last 5 years December corn limit down 3 of them, limit up in 1; open interest fell 22,670 led by July off 25,900 amid moderate volume; Weekly export sales Weekly export sales rose to 336,700t (of note unknown cancels 140,100t). Not establishing new positions pre-report.

SOYBEANS:

Exports: None Visible.

Comments: Deliveries tomorrow; talk of northern areas too wet and will lose plantings; China’s talk of fixing bank crisis prompting a wait and see attitude, global financial market still leery; China futures lower on expected ‘huge’ soybean imports piling into ports (we’ve seen this reason many times before but they only use it when they have to); China reports pig prices back to profitability due to government buying up stockpiled pork at inflated prices, soymeal hopes to pick up on more demand then?; open interest fell 8,90 led by July of 16,500 amid moderate volume; weekly export sales fell to 14,500t (unknown cancels 107,000t) with new crop sales 451,100t led by China 360,000t), meal sales a nothing 9,200t (cancellations of 107,000t from various countries noted) and soyoil a nothing at 2,900t; July beans back to the top 10% of its months-long trading range (see how easy it was!) and we await the USDA report tomorrow. Will rains get more widespread a problem? Not establishing new positions pre-report.

Wheat:

Exports: None Visible.

Comments: Weekly export sales rose to 731,800t (included a cancelation of 24,500t from China)….I am surprised the U.S. was more competitive and on top of that the GMO problem. I then remembered Monday’s record high volume and Friday’s bullish C-O-T report. I smell a bear-rat and hopefully it’s not me. As such, not covering hedges but recommend protecting hedge equity via call options (call spreads not as expensive) ‘just in case’. And this is NOT a USDA report play. In other news: Argentina winter plantings seeing favorable conditions; U.S. harvest better than expected; open interest rose 3,145 even as July falls 6,300 (U/Z up 8400), volume moderate.

Kleist Comments

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

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