Wheat Comment 10-23-09

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Wheat Morning Update & Commentary Wheat continues to feel like the movie Groundhog Day, it continues to rally and punish shorts as the market presses higher. Weather across the SRW Belt has greatly affected planting efforts. Many farmers are beginning to abandon plans to plant wheat. CFTC report out this afternoon should show reductions in the short positioning as commercials and producers shorts have been forced out. The volatile nature of the Chicago contract continues to lead some traders and hedgers to seek refuge in the MPLS contract. Import/Export business saw Morocco step in for 219,000 mt of EU Soft Wheat. Delivery is intended for mid December. 30,000 mt of Black Sea origin Wheat was bought late on Thursday by Israeli group. Bangladesh, and Iraq remain around the market for wheat. As a response to low cash prices, Russian announced that it will begin a grain intervention program starting on November 2nd. SRW Basis remains flat with a full pipeline, however some farmer selling has been noted on this rally. HRW has firmed as more buyers seem to be stepping into the market. PNW pipeline remains full. Aussie bank raised its grain harvest forecast for this year to 23 mln mt, up half million tonnes from their prior forecast. They say the crop in South Australia & Victoria will gain a boost from recent rains. Saskatchewan's crop harvest is behind schedule due to excessive wetness. Harvest in the latest report was unchanged at 77% complete same as ...

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• Publié par: Upru
• Nombre de lectures: 9
• Langue: English

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Page 1 of 3

312.896.2001

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be

reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for

informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates

may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

Wheat Morning Update & Commentary

Wheat continues to feel like the movie Groundhog Day, it continues to rally and punish shorts as the

market presses higher. Weather across the SRW Belt has greatly affected planting efforts. Many farmers

are beginning to abandon plans to plant wheat. CFTC report out this afternoon should show reductions

in the short positioning as commercials and producers shorts have been forced out. The volatile nature of

the Chicago contract continues to lead some traders and hedgers to seek refuge in the MPLS contract.

Import/Export business saw Morocco step in for 219,000 mt of EU Soft Wheat. Delivery is intended for

mid December. 30,000 mt of Black Sea origin Wheat was bought late on Thursday by Israeli group.

Bangladesh, and Iraq remain around the market for wheat. As a response to low cash prices, Russian

announced that it will begin a grain intervention program starting on November 2nd.

SRW Basis

remains flat with a full pipeline, however some farmer selling has been noted on this rally. HRW has

firmed as more buyers seem to be stepping into the market. PNW pipeline remains full. Aussie bank

raised its grain harvest forecast for this year to 23 mln mt, up half million tonnes from their prior

forecast.

They say the crop in South Australia & Victoria will gain a boost from recent rains.

Saskatchewan's crop harvest is behind schedule due to excessive wetness.

Harvest in the latest report

was unchanged at 77% complete same as last week

Wheat continues to defy all fundamental logic. Market remains technically driven with fund money

leading the charge.

Dollar weakness continues to encourage buying across commodities. Look to sell

scale up on strength today. Given the weak exports sales in corn this morning, it could be excellent

opportunity to buy Corn and sell Wheat. KC- CHI is near even money and remains a spread to keep your

eye on.

Overnight markets had fairly active trade with Chicago trading 5499 contracts. Chicago closed up 12

cents. Kansas City finished overnight trade up 9 cents and MPLS closed up 10 1/4 cents. Kansas

City/Chicago spread is now trading at an inverse in the DEC. The MPLS/Chicago spread has narrowed

all the way to 6 1/2 cents. Euronext (Matif) Milling Wheat continues to gain with a last trade at $5.49/bu

USD in the Nov.

Globex Overnight

Contract

Last

Net Change

High

Low

Volume

ZWZ9

563^6

12^0

564^4

551^4

5499

ZWH10

581^2

12^0

582^0

568^0

2091

ZWK10

589^0

9^0

589^0

580^0

97

ZWN10

599^0

11^0

599^4

586^0

244

KEZ9

562^0

9^0

562^0

551^2

774

KEH10

577^4

9^2

577^4

566^2

162

MWEZ9

570^4

10^2

570^4

558^2

406

MWEH10

585^0

8^2

585^0

575^4

30

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Page 2 of 3

312.896.2001

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be

reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for

informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates

may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

Early Opening Calls: 8-12 cents better

Top News

-- 30,000 mt of Black Sea origin Wheat was bought late on Thursday by Israeli group, acc. to traders

-- 219,000 mt of EU Soft Wheat was authorized for import by Morocco's gov't on Thursday, acc. to

traders.

Grain was for deliverable by mid December

-- Russia's AG Minister says the gov't will begin buying grain during intervention tenders starting

November 2nd

-- EU data shows the area granted 269,000 mt of Wheat exports, marketing year to date total is now at

5.7 mln mt

-- Aussie bank raises its grain harvest forecast for this year to 23 mln mt, up half million tonnes from

their prior forecast.

They say the crop in South Australia & Victoria will gain a boost from recent rains

-- Survey of grain conditions in Spain shows its soft Wheat crop with lower quality with lower protein

content & higher moisture levels, however Durum Wheat quality was said to have improved

-- Saskatchewan's crop harvest is behind schedule due to excessive wetness, acc to the local provincial

ag department.

Harvest in the latest report was unchanged at 77% complete same as last week

-- Fertilizer maker in Canada, Agrium, says earnings will come in 90-95% lower than the same quarter a

year ago.

Yesterday Potash Corp reported earnings 80% below yr ago quarter earnings.

The firm says

wet conditions in the US have pushed back demand for crop nutrients to spring of 2010, trying to remain

upbeat on their future.

-- Ag ministry official in Brazil says the gov't will keep their mandated 25% ethanol blend rate for

gasoline, but the gov't will continue to monitor the ethanol market

-- Latin American nations have probably seen the worst of the global economic crisis, but weak demand

in the US could weigh on Latam countries, acc. to IMF report

-- While China said it was happy with the US decision to lift a poultry import ban on Chinese poultry, it

was still investigating whether those announced changes adhere to WTO rules

-- Pending Tender: Oct 26th is bid deadline for 100,000 mt plus Wheat tender floated by Iraq's Grain

Board on Tuesday, acc. to their website.

-- Pending Tender: Japan's Ag Ministry also floated Oct 29th SBS tender for 52,200 mt of food grade

Wheat

-- Pending Tender: 60,000 mt of optional origin Wheat is sought by Bangladesh's gov't in a November

16th tender deadline

-- Pending Tender: A new 100,000 mt of Wheat tender for Dec 2nd was issued by Bangladesh state run

grainary, acc. to traders

-- Liffe Nov milling wheat futures were +3.25 euro better at 134.75 euros/mt.

-- Globex Wheat Vol. 72,503; Pit Vol. 7,082; Open Interest Change: - 1,210

-- Weather: 6-10 day Forecast: Below Normal Temps. Normal to Above Precip.

-- Outside markets: Energy Complex +0.23 at $81.42; Gold & Silver: +8.3 at $1066.9 & +0.370 at

$17.915; US $ +0.155 at $75.395

Cash Markets

-- CIF SR Wheat steady up 5: Oct. -10 to -?? Nov. -5 to +10 Dec. Opt. to +15

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Page 3 of 3

312.896.2001

Reproduction or rebroadcast of any portion of this information is strictly prohibited without the written permission of the Linn group, inc. the information reflected herein is derived from sources believed to be

reliable; however, this information is not guaranteed as to its accuracy or completeness. Opinions expressed are subject to change without notice. this material and any view expressed herein are provided for

informational purposes only and should not be construed in any way as an inducement to buy or sell commodity futures or options contracts. The Linn group and its officers, directors, employees and affiliates

may take positions for their own accounts in contracts referred to herein. Trading futures involves risk of loss. Past performance is not indicative of future results.

--

John Christopher

Linn Group

312.896.2061