Kleist Comments

MORNING GRAINS 7/15/13

Corn:

Exports: Sold Unknown 120,000t new crop.

Comments: As mentioned Friday, the market break looked a delayed response to the USDA report i.e. if happened Thursday the numbers matched the action. But Thursday the market reaction seemed more weather concerned and wanting to keep some premium. As such the market said ‘things look great near term and longer term forecasts are no threat’. Hence we have to trade accordingly. And if the crop comes in near estimates, countries like China’s big buy Friday is no cause to buy the market…there will be plenty to go around. I need to re-think sell areas. Crop ratings expected dn. 1-2% gd./excel.? Open interest little changed in total and only moderate individually amid light-side volume. C-O-T report: leaned bullishly. December corn’s major downside test $4.90 obviously.

SOYBEANS:

Exports: None Visible.

Comments: July’s expiry Friday proved to me the squeeze was as much a money game as anything else….notice how tough it was to find ‘value’? Now the August contract wants to be a wannabe squeeze as well. Might not work as well the July however since 1) old crop export sales turned negative (minus sales restock) and 2) weather co-operating enough we just might see some early beans. November beans hit my upside objective but felt no urgency for new shorts up there i.e. a weather premium of sorts would buy us time to short. Friday’s sell off says otherwise unless a new weather change emerges. Where’s the ‘dome of doom’ when you need it? In other news: open interest fell 2,550 led by H/X combined amid light-side volume; NOPA July crush estimate 117mln.bu. off 13% on year; China futures lower on U.S. weather; China GDP 7.5% vs. 7.7% 1Q, negative but in line with estimates; weather nearby Hot (but not excessively so) and HUMID; I’m regrouping sell areas for the November. Heard some talk crop ratings like the corn could be 1-2% lower.

Wheat:

Exports: None Visible.

Comments: Not much fresh here: Europe futures lower on U.S. market losses; Europe and Black Sea areas expected to see bumper crops; open interest fell 6400 led by U/Z combined; C-O-T report: leaned slightly negative; watch important support for the Sept. at $6.60-6.52 if it breaks that far; I haven’t totally given up on a friendly tilt here but doing it in call options. A huge corn crop will make wheat difficult to rally. User countries though may need food reserve refilling rather than feed reserves. Trading affair on the charts near term.

Kleist Comments

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

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