CORN: Corn futures rallied on bullish
outside market forces and speculative-led
buying. Outside markets, such as a weaker
U.S. dollar, served as the spark that
brought in investment fund money into
commodity markets, said Shawn
McCambridge, senior grains analyst with
Prudential Bache in Chicago. Oversold
market conditions following the previous
week’s declines helped exaggerate the
advances, as sellers were reluctant to take
on added risk heading into Tuesday’s
USDA crop reports, he added. Without
strong selling interest to offset the fund
buying, futures rose with bullish chart
patterns uncovering speculative buying
also. Pre-placed buy orders were activated
once active contracts pierced through
resistance at Friday’s highs on daily technical
charts, said Jack Scoville, analyst
with Price Futures Group. Otherwise,
futures had little fresh supportive news to
justify the gains, with ideal weather conditions
for farmers shifting there focus
from soybean to corn harvesting applying
light fundamental pressure, Scoville said.
December corn ended up 19 cents at
$3.86 per bushel, and March corn ended
19 1/4 cents higher at $4.00 1/4 per
bushel.
WHEAT: U.S. wheat futures finished
stronger on support from other markets
and fund buying, traders say. Strength in
neighboring CBOT corn and soybeans
and in outside markets helped lift wheat,
they say. Gold and crude oil were climbing,
while the U.S. dollar sank.
Commodity funds were buyers across the
grain and soy markets and bought an estimated
4,000 contracts of CBOT wheat.
Traders are waiting for the USDA to
release fresh supply/demand estimates at
8:30 a.m. EST Tuesday, and there was
positioning before the data come out, an
analyst says. The supply/demand report is
expected to reconfirm that world wheat
supplies are comfortable, a trader says.
CBOT December wheat closed up 22 3/4
cents at $5.20 a bushel, Kansas City
Board of Trade December wheat climbed
20 3/4 cents to $5.21 3/4, and
Minneapolis Grain Exchange December
wheat soared 27 3/4 cents to $5.46.
SOYBEANS: Soybean futures
climbed Monday, buoyed by speculative
fund buying amid bullish outside financial
market influences. The weaker U.S. dollar
triggered broad-based speculative buying
across the commodity sector, the evening
of previously sold positions ahead of
Tuesday’s crop production report buoying
prices as well, analysts said. The outside
markets overshadowed favorable harvest
conditions, providing an opportunity for
recent sellers to buy back previously sold
positions in an effort to reduce risk exposure
ahead of the governments soybean
production update. Aside from the outside
markets, futures had little fresh bullish
news to use as a rallying cry, but support
weekly export inspections was another
sign of good export demand, analysts
added. November soybeans finished 16
1/4 cents higher at $9.64 1/4 a bushel.
SOYBEAN MEAL/OIL: Soy product
futures soared in unison with soybeans.
Soyoil futures managed to retrace Friday’s
losses, feeding off outside support from a
surge in crude oil futures and technically
inspired buying interest. Soymeal futures
followed the path of soybeans, with short
covering following last week’s price setbacks
aiding the advances. However, the
market did lose some product share value
on adjustments in the meal/oil spread relationship.
December soymeal ended $5.50
higher at $294.30 per short ton, and
December soyoil finished 100 points higher
at 37.77 cents per pound.
OATS: Oat futures finished stronger
with the rest of the grain floor. December
oats rose 4 1/2 cents to $2.58 1/2 per
bushel, and March oats closed up 4 1/ 2
cents at $2.72.
RICE: Rough rice futures closed higher
with the rest of the grain floor on supportive
outside influences. The market finished
higher with neighboring corn, soybeans
and wheat as the U.S. dollar fell
and as gold and crude oil prices climbed.
In rice news, the Philippines said it will
seek to buy up to 600,000 tons of rice in a
tender to be held Dec. 1. That is the
MARKET RECAP
see MARKET RECAP on page 2
Commodity News For Tomorrow
Latest CME Group Prices
Corn (Dec) 383.5
Wheat (Dec) 520
Soybeans (Jan) 972
Soybean Meal (Dec) 294.3
Soybean Oil (Jan) 38.19
Oats (Mar) 272
Rough Rice (Jan) 1522.5
Lean Hogs (Dec) 55.8
Live Cattle (Dec) 84.95
Feeder Cattle (Jan) 95.7
Lumber (Jan) 207.2
Ethanol (Jan) 1.86
*Data as of 2:30 CT Source: Dow Jones, Thomson Reuters
Copyright 2009 © Dow Jones & Company, Inc. All Rights Reserved.
Brought to you by CME Group | www.cmegroup.com
page 1
November 09, 2009
3 p.m. CT
FO Licht Sees 09-10 World Wheat
Output At 666.69M Tons
World 2009-10 wheat production is revised up to 666.69 million metric tons,
from the October estimate of 663.37 million tons, Germany-based analytical firm
F.O. Licht said Monday.
This is a 2.6% fall on the year.
European Union 2009-10 wheat production was revised up 830,000 tons on the
month to 138.48 million tons, said the firm.
“Wheat production for the 2009-10 season was revised slightly up to 666.7 million
tons thanks to better than expected results in India and Europe, where reduced
production in France was compensated by positive revisions in Romania, Italy, and
several smaller nations,” said the firm.
World 2009-10 corn production was revised up 2.31 million tons on the month
to 778.51 million tons, while world 2009-10 barley production was revised up
960,000 tons on the month to 146.99 million tons.
However, the corn and barley crop estimates remained below the bumper production
figures of 2008-09.
Brazil Oct Farm Vehicle Sales
Up 13% On Month - Industry Group
The Brazilian Motor Vehicle Manufacturers Association, or Anfavea, said
Monday that farm vehicle sales in Brazil rose 13% to 6,160 units in October from
September.
Brazil also reported sales of four-wheeled tractors, the main farm vehicles sold,
of 5,088 units in October, up 9.7% compared to September.
Brazil’s total farm vehicle sales reached 44,526 units between January and
October, down 4.2% from the same period in 2008.
Brazil is the world’s No. 1 producer of coffee, sugar, orange juice and the No.2
producer for soybeans.
Dry Weather Speeds Up Western Canada’s Harvest
The sustained period of dry weather seen late last week and through the weekend
provided producers across western Canada with an opportunity to make significant
harvest progress, according to a Canadian Wheat Board official.
“The good weather conditions allowed producers in Manitoba and Alberta to
generally get most of the crops that had been left on the fields off and into the bins,”
said Bruce Burnett, director of the CWB Weather and Crop Surveillance
Department.
In Saskatchewan, good harvest progress was also made in a number of regions,
but there were still a couple of concentrated areas in which another week to 10
days of clear and warm weather will be required to finish up harvest operations,
he said.
“I would estimate that in most areas of Saskatchewan, the harvest progressed
about 10% from the level seen last week,” Burnett said. “However, there are some
isolated areas in which the ground and the crops are too wet and need a few more
days to dry down.”
The weather forecast for the early part of this week was seen as being conducive
for further good harvest progress, Burnett said. Producers in Saskatchewan, as a
result, were seen making some further progress in getting the crop into the bin.
However, a system moving through the Canadian prairies Thursday was expected
to result in precipitation in the form of snow and slow the remaining harvest
activities.
Normally, harvest operations in western Canada would be complete by this time,
Burnett acknowledged.
“To actually be getting crops off in the middle of November is a very good thing,
but is on the rare side,” he said.
“biggest individual tender in a long time”
for the international rice market, says Ed
Taylor, analyst for firstgrain.com. The
rice will mostly likely come from Asia,
which could support Asian prices and
indirectly U.S. prices, he says. Traders are
waiting to see January rice closed up 7
cents at $15.22 1/2 per hundredweight.
PORK COMPLEX: Lean hogs finished
flat to higher on funds that rolled
long December positions into February.
Short-covering and buy stops added to
hogs’ late-day rally. The Dow Jones
Industrial Average’s sharp gains, the U.S.
dollar’s steep tumble and CBOT corn’s
considerable upturn emboldened farmonth
hog longs. December hogs finished
up 10 points at 55.80 cents a pound, and
February closed up 47 points at 63.32
cents. Bellies ended lower on sell stops,
February chart support loss and lagging
midday fresh belly quotes. February closed
150 points lower at 84.60, and March also
ended 150 points lower at 82.50 cents.
CATTLE: Live cattle settled mostly
firm on short-covering. February tripped
buy stops with the aid of longs that rolled
into the contract out of December. The
U.S. dollar’s drop, U.S. equities’ significant
upswing and high-priced CBOT corn
eventually enticed back-month cattle
bulls. December ended down 5 points at
84.95 cents a pound, and February ended
up 10 points at 86.37 cents. April finished
up 27 points at 89.27 cents. Feeder cattle
finished weak on sell stops, bear spreads
and January chart support loss. November
ended down 40 points at 94.25 cents, and
January also closed down 40 points at
95.70 cents.
LUMBER: Lumber ended mostly
lower in a limited-volume position-squaring
day ahead of the November contract’s
expiration Friday. Traders moved positions
from one contract month to another,
and it was difficult to determine a pattern
to the trading because of the limited volume.
Cash markets remained quiet. The
November contract settled $1.10 lower at
$185.00 per 1,000 board feet. January
ended 80 cents lower at $207.20. March
closed 60 cents lower at $226.50.
ETHANOL: Ethanol futures settled
firmer. December ethanol was 6.3 cents
higher at $1.915 per gallon, and January
ethanol was 3.5 cents higher at $1.856.
MARKET RECAP (cont.)
HEADLINES
see HEADLINES on page 4
Copyright 2009 © Dow Jones & Company, Inc. All Rights Reserved.
Brought to you by CME Group | www.cmegroup.com
page 2
Commodity News For Tomorrow November 09, 2009 3 p.m. CT
Commodity News For Tomorrow November 09, 2009 3 p.m. CT
Copyright 2009 © Dow Jones & Company, Inc. All Rights Reserved.
Brought to you by CME Group | www.cmegroup.com
page 3
CPO Prices May Rise
To MYR2,625 By April
- Analyst Fry
Crude palm oil prices may rise to
MYR2,625 a metric ton by April if Brent
crude oil prices hold steady at $75 a barrel
as more vegetable oils are used for biodiesel
amid a rise in demand for the clean fuel,
industry analyst James Fry said Monday.
The growth in biofuel production,
mainly driven by mandates in many countries,
amplifies crude oil’s rising influence
on vegetable oil prices, including palm oil.
Fry also said if Brent crude fell $10 to
$65/bbl, palm oil prices would then ease
to MYR2,350/ton.
“Instead of stocks as a main price
driver, crude oil is now a major influence
for (vegetable oil) via the link to biodiesel
demand,” said Fry, chairman of UK-based
LMC International Ltd., at a regional palm
oil conference.
“Since January 2007, crude oil has
become the strongest determinant of vegetable
oil prices. Stocks, which used to
play a strong influence on palm oil prices,
have declined (in importance).”
CPO prices were under pressure the past
few weeks on fears domestic palm reserves
have reached 1.75 million-1.80 million tons
as output continued to outpace demand.
Trade participants fear palm oil stocks
may rise further in November, but a
stronger crude prevented a slide in prices.
Fry said Malaysian palm oil stocks
may rise in November and December as
palm oil production gathers pace, but
added stocks aren’t likely to rise above 1.9
million tons.
Fry also said Malaysia’s palm oil production
in 2010 may rise above 2008’s
production of 17.7 million tons as palm
trees recover from biological tree stress.
Biofuel mandates in Germany and the
U.S., both major biodiesel consumers,
have made soy prices more sensitive to
non-food demand.
“The swings in monthly (biofuel)
demand in the US and Germany have
reached over 250,000-300,000 tons (a
year), which are large in relation to the
much more stable growth in world food
demand,” Fry said.
Even though palm oil isn’t widely
used in the European biofuel sector due to
environmental concerns, palm is increasingly
used as a substitute for soyoil and
rapeseed in food.
“For this reason, non-tariff barriers,
like those proposed against palm oil in
biodiesel use in the EU, act mainly as an
irritant,” he said.
Philippines Plans To
Buy 600,000 Tons Rice
In Dec
The Philippines isn’t likely to get
attractive offers when state-owned
National Food Authority holds a tender
Dec. 1 to buy up to 600,000 metric tons of
rice, market participants said Monday.
“NFA will not be as lucky the second
time in a row as supply concerns in India
are now setting the ground for price escalation
in the international market,” said
Ajeet Kumar, a research analyst at New
Delhi-based SMC Global Securities.
However, prices aren’t likely to rise
sharply from those offered at the last NFA
tender as supply concerns in India are tempered
by high wheat stocks, Kumar said,
adding global rice prices aren’t likely to
rise sharply until after March next year.
The NFA is seeking to buy 25%-broken
grade rice for shipment between
February and May next year. Possible
sources include Thailand, Vietnam, China,
Pakistan, Australia and the U.S.
However, traders at international trading
houses said a new tender provision requiring
potential suppliers to present a previous single
contract involving up to 25% of the
agency’s budget for the tender would deter a
lot of suppliers from participation.
“It would be hard for private suppliers
like us to comply. It’s obvious this provision
is designed to favor one supplier,”
said one trader, referring to Vietnam
Southern Food Corp., a major supplier to
the Philippines.
“It’s too prohibitive, it doesn’t make sense
for the NFA to limit itself to one entity,” said
a second trader with another trading firm.
Both traders agreed, however, that it
makes sense for the NFA to buy larger
quantities since its tender Nov. 4 attracted
“good prices,” but prices could rise significantly
in the new year.
The NFA has set aside a budget of
PHP15.264 billion ($325 million) for the
purchase.
A pre-bidding conference will be held
Nov. 16.
The Philippines is expected to buy at
least 2.35 million tons next year, slightly
above its 2008 record rice imports of 2.3
million tons, following extensive typhoon
damage this year to rice crops.
Ukraine Harvests
46 Mln Tons Grain
To Nov 6
Ukraine harvested 46 million metric tons
of grain to Nov. 6 on 15 million hectares, or
97% of the total area to be harvested, with the
average yield of 3.05 tons a hectare, the agriculture
ministry said Monday.
The ministry said the corn harvest to
date, which is still continuing, was 8.24
million tons on 1.67 million hectares, or
79% of the total area to be harvested, with
the average yield of 4.95 tons a hectare.
The agriculture ministry earlier forecast
Ukraine’s grain harvest this year at 45
million tons, down from the 53.3 million
tons harvested in 2008.
Malaysia Bureau: Heavy
Rain May Cause Floods
In Johor, Pahang
Heavy rains over several provinces in
peninsular Malaysia may cause flooding
along rivers and low lying areas, the
Malaysian Meteorological Department
said Monday.
Rains are likely to accelerate in key oil
palm growing states Johor and Pahang
until Tuesday morning, said an official at
the MMD.
“Pahang has experienced heavy rains
in the past few days and it may cause
floods in low lying areas,” she said.
Heavy rains have been taking place at
regular intervals over Kelantan and
Terengganu, leading to floods in various
districts of the two states. The MMD has
issued an alert saying that rains may continue
in Terengganu, Pahang and Johor
until Tuesday morning.
Emerald Australia: Has
Grower Contracts For
1.5M Tons Of Crop
Commodity manager Emerald Group
Australia reported Monday growers have
committed almost 1.5 million metric tons to
its early order premium pooled collective
sales arrangements, covering wheat, barley
and canola, which are now being harvested.
The privately held group also announced
that in partnership with its financial partners
including ANZ Banking Group (ANZ.AU) it
has up to A$350 million in inventory and trade
finance for the harvest, Managing Director
Michael Cattanach said in a statement.
HEADLINES (continued from page 3)
Commodity News For Tomorrow November 09, 2009 3 p.m. CT
Copyright 2009 © Dow Jones & Company, Inc. All Rights Reserved.
Brought to you by CME Group | www.cmegroup.com
page 4
Argentina Soy Planting
Lags; Many Areas Need
Rain - Ministry
Argentine soybean planting continues
to lag across much of the edges of the farm
belt due to insufficient moisture, while
conditions are good in the central regions,
the Agriculture Ministry said in its weekly
crop report late Friday.
In the Marcos Juarez district of
Cordoba province, the planting pace
slowed last week due to dry topsoil. In the
district, 60% to 65% of the forecast area
has been planted and the young crops are
developing well, despite the low-quality
seed planted.
Seed quality is down due to drought
last season, with farmers having to put a
greater number of seeds into the soil to
compensate for decreased germination
rates, the Ministry said.
In the Casilda district of Santa Fe
province, planting is proceeding quickly
after heavy storms had prevented progress
the previous week, the Ministry said.
According to the Buenos Aires Cereals
Exchange, farmers have planted 12.1% of
the forecast 19 million hectares as of
Wednesday, 18 percentage points behind
last season.
According to the exchange, planted
area is expected to total a record 19 million
tons.
Argentina’s 2009-10 soy crop is likely
to get a boost this year from favorable
weather conditions generally associated
with a mild El Nino.
Agricultural analysts polled by Dow
Jones Newswires forecast 2009-10 soybean
production of between 48 million
and 55 million metric tons, up from the
previous record of 47.5 million tons
grown in 2006-07.
The wheat crop continues to develop
well in the central farm belt, but is struggling
with dryness around the fringes,
according to the Ministry.
According to the exchange, as of
Wednesday, farmers had harvested 7.4%
of the planted area, in line with last year’s
harvest pace.
The exchange forecasts 2009-10
wheat production of 7.75 million tons,
down sharply from the average of 14.8
million tons over the previous five years.
With domestic demand pegged at 6.5
million tons by the government, just 1.25
million tons of wheat are likely to be left
over for export from the 2009-10 crop.
The corn crop is developing well
across most of Buenos Aires province,
Santa Fe and Cordoba provinces, although
more rain is needed in some areas.
However, conditions are dry in Entre
Rios, La Pampa, San Luis and Chaco
provinces, with more rain needed soon,
according to the Ministry.
As of Wednesday, 66.7% of the forecast
1.875 million hectares seen going to commercial
corn this season had been planted,
5.9 percentage points behind the pace at this
time last season, according to the exchange.
The Rosario Grain Exchange forecasts
total corn production at about 16 million
tons.
The government has pegged domestic
consumption of corn from the 2009-10
crop at 8 million tons, leaving an equal
amount available for export, according to
the Rosario exchange.
US Wheat Seen
Consolidating After
October Rollercoaster
U.S. wheat futures are expected to
spend the rest of the year drifting in a trading
range after a rollercoaster ride in
October took prices to 12-week highs
before a sharp pullback.
World wheat supplies remain large and
export demand remains lackluster amid
stiff competition for business. However,
the downside for Chicago Board of Trade
wheat futures is limited because the fundamentals
are well known and there is
some supportive uncertainty about 2010-
11 U.S. plantings, analysts said.
CBOT December wheat should consolidate
and trade in a range of about $4.50
to $5.50 per bushel for the near term, said
Joe Victor, vice president of marketing for
Allendale. The contract on Monday traded
near $5.
Prices are “unlikely to decline precipitously”
during the next month, despite poor
demand, due to uncertainty about final U.S.
planted area, said JP Morgan analyst Lewis
Hagedorn. Wet weather that has delayed the
corn and soybean harvests has slowed soft
red winter wheat planting because many
producers seed SRWwheat after soybeans.
SRW wheat supplies are “tenable,” but
the downside risk is limited during the next
three to nine months “as the market will need
to hold some risk premium amid U.S. winter
wheat planting uncertainty,” Hagedorn said.
SRW wheat, traded at the CBOT, is used to
make pastries and snack foods.
“The bottom line for the wheat market
remains as it has for several months: neutral
on comfortable domestic and global
supplies,” Hagedorn said.
Fundamentals would need to change
significantly for CBOT December wheat
to rally and take out the $5.75 level, said
Bill Tierney, general manager of Doane
Advisory Services. Global stocks probably
won’t expand significantly from their
current level, so there is not too much
downside risk, he said.
The U.S. Department of Agriculture last
month pegged 2009-10 world ending stocks
at an eight-year high of 186.7 million tons.
A monthly supply/demand report due out
Tuesday will feature an updated carryover
estimate and is expected to reconfirm that
world supplies are comfortable.
“I think we’re caught in a trading
range with very little reason to go higher,”
said Tom Leffler, owner of Leffler
Commodities. “There are sizable supplies
both in the U.S. and world. There’s just no
reason for panic.”
Indeed, fundamentals indicate a lower
trend should prevail due to the large world supplies
and slow demand, said Shawn
McCambridge, grains analyst at Prudential
Bache.
Copyright ' Dow Jones & Company
Commodity News For Tomorrow is made available as a complimentary service
($119/year value) by the CME Group in partnership with Dow Jones. No further redistribution
is permitted without written permission from CME Group and Dow Jones.
Commodity News For Tomorrow is intended to provide factual information, buts its
accuracy cannot be guaranteed. CME Group and Dow Jones are not registered investment
advisors, and under no circumstance shall any of the information provided be construed
as a buy or sell recommendation or investment advice of any kind. The views
expressed in any article are solely those of the respective individuals cited. The CBOT
Rules and Regulations should be consulted as the authoritative source as to all CBOT
contract specifications.
Contact Us
If you have any questions or comments regarding Commodity News For Tomorrow,
please contact us at info@cmegroup.com.
Advertise
If you would like to inquire about advertising opportunities within
Commodity News For Tomorrow, please contact us at info@tradersmedia.
Cancel Subscription
If you would like to cancel your subscription to Commodity News For Tomorrow,
please email info@cmegroup.com.
TALKING POINTS
Copyright 2009 © Dow Jones & Company, Inc. All Rights Reserved.
Brought to you by CME Group | www.cmegroup.com
page 5
Commodity News For Tomorrow November 09, 2009 3 p.m. CT