Tuesdays session was a huge volume sell - off for soybeans and the entire grain complex. Corn and Wheat ended the day locked limit down and soybeans at one point were limit down prior to ending the session down 47 ¾ cents. Traders say a rebound in the dollar and weakness in gold and crude oil weighed on the market prompting fund selling. With the wheat at record highs and soybeans trading @ $10.00 levels the markets were primed for profit taking. Harvest pressures also factored into the break one trader said. Volumes were huge across all markets, soybeans 207,907 contracts traded, soybean oil 80,592 and meal 73,683. funds sold an estimated 12,000 soybeans, 4,000 meal and 5,000 oil.
Today's early opening calls are weaker as traders expect the sell-off to continue. Fund managers liquidated long positions in mass on Tuesday and traders indicate they expect this to resume today at least initially. Traders say much of the weakness in grains, especially the last week or so has been tied into weakness in the dollar which fell to record lows against the Euro and if the dollar rebounds it could continue to have a bearish influence on soybeans and the entire grain complex. Also weighing on prices is the advancing US harvest which is ahead of the normal pace due to ideal weather. Overnight Malaysian palm oil futures ended lower.
Early Opening Calls: Soybeans 8 to 10 lower, .20 to .40 lower and meal $3 to $4 lower.
Top News
-- 50,000 mt of Wheat being tendered for by Bangladesh gov't, with Nov 1 closing date for tender.
-- 80,000 mt of Russian Wheat bought by Egypt's GASC Tuesday. 30,000 mt Russian wheat from Egyptian based traders at 2,149 Egypt pounds/mt, while 25,000 mt of wheat purchased from Friends & 25,000 mt bought from Alex Grains
-- Stats Canada numbers on Thursday eagerly awaited by wheat traders; average total production estimates are between 19.6 and 20.5 mil tons
-- Japan expected to purchase 160k tons of wheat in their normal weekly tender with US/Canada, shipment scheduled for Dec to early Jan
-- Japanese ag official says Oct 25 is date set for 21,000 mt mill wheat & 5,000 mt of barley tender
-- Japanese ag official says Nov 29 is second date set for 7,800 mt mill wheat & 40,900 mt of barley tender with delivery expected in January-- 87% of oilseed & grains have been harvested by Saskatchewan farmers in latest province ag report for the week ending Sept 30, but slighly ahead of the 79% 5 yr avg harvest pace
-- eCBOT Vol. 43,028; Pit Vol. 7,051; Open Interest Change: +1,296
-- Weather: Above Normal Temps. Normal to Above Precip. Showers and thunderstorms will end in the eastern Corn Belt today.
-- Outside markets: Energy complex: crude higher, products higher ; Gold & Silver higher; US $ weak vs Euro, slightly higher vs Yen.
Cash Markets
-- CIF SR Wheat steady up 10 : Oct. +35 to +?? Nov. +45 to +?? Dec. +45 to +60
Nathan T. Smith III
Linn Group
nsmith@linngroup.com
toll free: (877) 787-6278
local: (312) 896-2090
fax: (312) 896-2050
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