Kleist Comments

MORNING GRAINS 7/24/13
MORNING GRAINS 7/24/13

Corn:

Exports: Taiwan buys 23,000t U.S.; Japan buys 120,360t feed barley; So.Korea buys 120,000t opt/org.

Comments: Tracking Asian grain reports: East Asia, Vietnam and Philippines bought 1.2mln. corn/wheat and soymeal since late last week….in part fearing a China that bought 5.0mln.m/t’s of U.S./Aust. wheat and corn the last 7 weeks; cooler weather keeps stress out of the equation unless long; funds indeed as open interest rises 18,100 contracts led by Dec. up 11,100 amid stronger volume. Getting near my near term (lower end) downside objective of $4.75 and will start to look to buy calls to protect hedge equity.

SOYBEANS:

Exports: Taiwan buys 12,000t U.S. soybeans.

Comments: Not even IN August yet: ‘double high at $15.25-1/2-15.26-1/4 yesterday to today’s low of $14.25. No sense repeating my ‘tongue in cheek’ fundamental explanation but my bottom line on it: bad business, bad credibility, bad reasons. If not, this break a ‘gift of the gods’.

China PMI negative their manufacturing segment, some talk they will go to a stimulus measure (“Uncle Ben” Bernanke would be proud); China futures lower on profit taking and talk government will release stock reserves (3.0mln.m/t’ auction); open interest little changed in total, of note August down 4123 with Sept. up2104 and rest little changed, volume moderate.
No opinion change.

Wheat:

Exports: None Visible.

Comments: Chin report sees them pushing stocks rebuilding amid crop damage and ‘cheap’ world prices (also see corn comments); Wheat Quality Tour 1st day says ylds. on HRS 43.3/bu./acre vs. 42.9bu. year; open interest rose 3,200 (funds) amid really light volume. Near term objective at $6.50 nearly touched, take pressure off corn and a decent rally here likely.

Kleist Comments

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

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