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May 23, 2012, 06:48:56 AM

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Weekly Grains Review

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Topic: Weekly Grains Review (Read 562 times)

flotradz06

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Joined: Mar 2010
Posts: 57

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Viet Nam

Dec 13, 2010, 11:13:35 PM

As always, I would like to save your time to review the Grain market. Again, I will let you be with the analysis by Pitguru Matthew Pierce right away. Note down the information on grain market and check for more news on the futures market for your investment!

The Grains Review
For the week of December 13th, 2010

Friday saw a lower session following a choppy low volume trade. The reaction to the WASDE report was muted with no real information offered to the trade. The only real surprise was the by class wheat breakdown with more HRW seen than expected. This is mitigated by dramatically poor weather all over the domestic HRW region. Row crops saw a minimal impact with only spreading seen late as a reason for the drop in beans. There was good buying in bean oil with this followed up by a strong session in both Malaysian palm and Chinese bean oil markets overnight. This will continue through the day session today. The macro side of the market was muted on Friday and should be quiet today ahead of the mass of financial information due out early this week. The FOMC will set the tone for financials heading into year end. Other than macros, the fundamental side of the market remained quiet heading into the weekend with only talk of Chinese bean interest faltering due to immediate oversupply. This is a minor issue in the big picture which allowed for all market to climb overnight led by Chinese markets. The day session looks to open in line or stronger than the overnight with growing support from crude oil is helping the whole commodity basket. A weekend freeze in central FL offers upside to softs with both sugar and OJ moving dramatically higher.

Beans are called 10-12 Higher taking back Friday’s late losses with a move back to the middle of the range seen. Indicators are weakening at the upper end of the range. Corn is called 3-5 higher staying well above the 50-day MA sitting at 565.50 with no immediate resistance seen. Indicators remain positive nearing the upper end of the range. Wheat is called 4-6 Higher remaining in a tight chop range between 766.25-811. Indicators remain positive but look weak at the upper end of the range. Meal is called 1-2 dollars Higher after touching the 50-day MA on Friday at 337.70. Indicators are in a negative choppy stance in the middle of the range. Bean oil is called 70-90 Higher looking to move against the range high at 55.43 this week. Indicators remain positive at the upper end of the range.

Looking to weather, Brazil saw heavy rains over the weekend with normal to above normal temps through this week. A pretty nice start to the season. Argentina saw weekend rains but this is not enough to counter early dryness if coupled with a below average precip forecast through the end of the year. Western Kansas saw minimal rain and snowfall over the previous 48 hours with the Northern and eastern regions getting a scattered .50” with the southern and western regions receiving less than a .25” inch spattering. This is nowhere near enough to counter early season dryness even for wheat. There is no moisture in the forecast for Hays KS and west for the next 8-days with only a mild chance on Dec 22nd. The SRW remains in good shape with a solid moisture base and a temperature break later this week. Australia remains a bog in the SE with crop quality continuing to deteriorate. This will only get worse before it gets better with above average precip expected in the region all week.

All in all the market seems content with price levels but realizes that the risk is to the upside, not downside. The biggest upside potential right now is wheat due to world weather but with the new calendar year on our doorstep we have to look at row crop potential. The trade is set for a volatility led inflation backed rally in the new year so get ready to dive in head first in Jan.


« Last Edit: Dec 20, 2010, 11:19:19 PM By: flotradz06 »

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flotradz06

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Joined: Mar 2010
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Viet Nam

Jan 04, 2011, 03:42:40 AM

We are going to have a look at the next grain review in the first week of 2011 by Pitguru Matthew Pierce.

The Grains Review
For the week of January 3rd, 2011

Looking back at last week the markets saw a good upside move across the board in agricultural Commodities with new money coming into the "hot" topic for the first quarter of 2011. Open interest was up heavily in corn on Friday starting off the year at a whopping 1.5495 million contracts This is a positive but sobering factor to many players. The overnight session saw wheat fight back against corn and beans with limited interest seen overall until the final couple minutes. All markets surged higher into the overnight close with wheat reaching 20+ higher, corn and beans 3-5 higher with meal and oil higher with oil winning. This may be a New Year play but with Europe and most of the corporate world still out I feel it is a minor factor overall. The real ammunition will not come out until tomorrow and Wednesday. Weather problems in Australia and continued dryness in the US plains have wheat on the offensive to start the year. Both KC and Minni held ground against Chi overnight starting 2011 just below contract highs in the spread with more to follow as protein wheat moves into focus. Bean oil gained against bean meal due to Indonesia setting their export tax at 20% versus 15% in Dec. Palm oil trading 64 Ringgits higher, with this due to growing supply side concerns.

Beans are called 3-5 Higher after reaching new contract highs on Friday. The next target is the spike high from Sep ‘08 at 1490.00. Indicators are in overbought territory lacking any signal of weakness. Corn is called 2-4 Higher after breaking above contract highs on Friday. I believe there is nothing to stop a continued run approaching or eclipsing the $7.00 level with weekly and monthly charts offering no resistance. Indicators are in the upper most reaches of the range but show no signs of weakness. Wheat is called 20-25 Higher looking to reach for the contract high shortly sitting at 864.25. This is the only market not sitting at contract highs making it even more attractive for late coming bulls. The weekly continuation chart has the first upside target a bit closer at 841. Either way, technicals are supportive. Bean Meal is called 1-2 dollars Higher following beans to new contract highs. The market has plenty of room before reaching the next upside continuation target sitting at 433.40 marking the ‘09 high. Bean oil is called 30-40 Higher following crude to the upside. I see no technical resistance for 11-cents to the upside offering massive potential if palm and crude lead the way.

Fundamentally the market is starting off quietly with no demand talk so far…but most countries remain on holiday.

Looking at weather, I see the catalyst for wheat with SE Australia facing extended flooding. Areas south of Sydney and into Melbourne are looking for additional rains this week adding to the wheat woes. Talk has the Australian wheat crop dropping by 7-9 MMT in the next couple months. This would offer wheat the needed fundamental incentive like we saw in ‘08. Add to this the growing problems in the US HRW plains and I see a real reason to be supportive wheat in the first quarter of 2011. No additional moisture in Hays Kansas over the previous week and only minimal snow cover has many farmers in the region talking about plowing under their crop looking for an opportunity to plant corn in the spring. This would dramatically change both the US and world balance sheets heading into spring planting making the acreage battle all the more interesting. In Argentina I see the catalyst for beans and to a larger degree corn. Arg is looking at hot and dry weather for the next week with only Cordoba and Santa Fe looking for any measurable rains. These will focus on the bean areas offering minor relief. Only .20-.50” are expected. More is needed in a short window to avoid early stress losses during pollination in the north. In Brazil we are seeing a drying pattern with RGDS hot and dry while Parana dries as this week progresses. Mato Grosso is in good shape so far with no change in sight.

The fundamental side will come more into focus as the trade start to hear estimates ahead of the WASDE report due to on Jan 12th. I will have a full write up for subscribers ahead of the all import report with estimates out as they come to me.

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mike95910

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Joined: Feb 2011
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mike95910 is from United States

United States

Feb 16, 2011, 01:29:02 PM

Hey thanks for the post, enjoyed the easy read during lunch.

vikramrandhawa

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Joined: Sep 2011
Posts: 71

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vikramrandhawa is from India

India

Sep 07, 2011, 07:12:57 AM

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