Kleist Comments

MORNING GRAINS 6/3/14
MORNING GRAINS 6/3/14

Corn:
Exports: None Visible.
Comments: New swing lows yesterday ad July currently holding just above them; plantings about complete at 95%; sometimes as planting ends the market turns sideways and looks at weather outlooks but the NWS update sees June normal temps. and normal/slightly above normal precip…….looks good to me; ties record: gd./excel. at 76% corn conditions; wire service headline: Ukraine plantings lag year ago!, reality: 97% planted vs. yr. so lost 3% maybe on higher fuel/fertilizer costs and political nervousness (a number I mentioned awhile back); some of the boys watching the U.S. dollar for a potential upside breakout; open interest rose 5,300 even as July falls 15,000 amid good volume. We need a rally, I know. When the plug was pulled not surprisingly it keeps chugging lower. My last point for a recovery/consolidation was $4.68 which held only a few days, now we might look to a decent support area at $4.57-4.55 to hold. I will advise: writing an article about how there might be a ‘perfect storm’ forming for the corn in July. Get sales and hedges up to date.

SOYBEANS:
Exports: None Visible.
Comments: Plantings 78% well over estimates.
Certainly glad I said to not follow that rally yesterday. The whole thing here still smacks of the game being over and using the inspections was a feeble attempt recapture the squeeze magic. Sufferin’ Safras says Brazilian sales at 72% vs. 71% yr., Ag Minister says May exports 7.6mln.m/t’s vs. 8.25mln. April; my Argentine source says sales 30% vs. 33% yr.; Canada’s Canola crop plantings to that already planted seen in good shape; Asian CPO lower on higher production/lower exports, Morgan Stanley ‘reassessing’ a forecast El Nino as “unlikely” to effect yields now, maybe in 4Q 2014 and 1Q 2015 (I know I mentioned another source on El Nino there last week); China futures bean complex strongly lower; BATTLE LINES DRAWN AGAIN? Open interest rose 11,300 led by the November but even the JULY was up 1800, volume though moderate/light-side……..if technical selling I suspect it’s a play ahead of taking out major m/a support; if technical buying then “Defending” against major m/a’s. I remain bearish but here’s those numbers: July major m/a’s at $14.78-14.70-3/4/November’s at $12.27-12.23-1/2.

Wheat:
Exports: None Visible.
Comments: Spring wheat plantings 88% equal on average; U.S. weather overall decent for both HRW and SRW; Ukraine plantings all grain 96% of intended area; Ukraine Agrarian Confederation sees total crop 60mln.m/t’s vs. 63mln. yr. (no big deal boys); open interest rose 3,600 led by Sept. amid strong volume; yes, terribly oversold but needs a trigger not visible yet; as such the objective then the gap at $6.25-1/2-6.10-1/2.

Kleist Comments

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

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