Morning Highlights By Tim Emslie Highlights • China’s flash PMI manufacturing reading was 47.7, down from 48.3 in the final June reading and below expectations for 48.5. • The best rains in the 6-10 day forecast are in the far western part of the Belt- the Dakotas to Kansas. Below normal temps are seen that time period. • Day 2 of the North Dakota Wheat Quality Council tour is today. CHS Hedging is reporting from the tour via Twitter at @hedgeit and @hedgeit_jhof. Yield estimates on Day 1 were slightly below last year on the route from Fargo to Bismarck. • The U.S. dollar is up .06 at 82.00 on the index, crude oil is down .36 at 106.86, and S&P 500 futures are +5.50 at 1693.80. Corn • December corn traded inside yesterday’s range overnight after yesterday’s decline to a new 2013 low. • South Korea bought 120 tmt of optional origin corn for December/January arrival. Black Sea origin is expected. • Taiwan Sugar bought 23 tmt of U.S. corn and 12 tmt of U.S. soybeans for August/September shipment. Outlook: Consolidating yesterday’s new lows with an inside session overnight in the December contract Oilseeds • Open interest in the August contract is at 35,093, down 4,123. After setting a new 2013 high early yesterday, the August contract continued to see selling pressure overnight. Many cash bids have moved to either the September or November contracts. • Most active Malaysian palm oil futures were down 1.6% to the lowest level since 2009. • Today is the second day of hearings in the House of Representatives on the state of the RFS. Yesterday, representatives from the renewable fuels industry said that the existing RFS legislation contains sufficient built-in flexibility, while petroleum industry officials said that the RFS required reform. Congress is perceived as open to some reform of the RFS, and these hearings are a potential starting point that process. Under existing rules, biodiesel production has the potential to increase substantially. Part of that potential increase would be to fill volume obligations that are impossible for ethanol to meet due to the overall gasoline consumption trends and the practical 10% blend wall. Outlook: Nearby contracts continuing to see liquidation, new-crop higher Wheat • Egypt is tendering for wheat for September 1-10 shipment, its third tender this month. The cheapest offer received was from Bunge for 60 tmt of Romanian wheat at $252.34. Offers on Ukrainian and Russian wheat were similar; French wheat was about $10/tonne higher. • Russia’s Grain Producers Union says wheat production may be 45-48 mmt. The USDA is at 53 mmt. • Milling wheat in Paris is up .50 to 190.75 euro/tonne. Outlook: Getting support from active export demand, even though purchases are non-U.S. origin
Posted on: Wed, 24 Jul 2013 13:16:48 +0000
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