Wheat Comment 10-15-09

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Wheat Morning Update & Commentary An intra-day high of $5.30 was achieved in trade yesterday, a key objective on most technicians' charts. Wheat sold off quickly and struggled to remain positive through the close. Major importers of wheat are looking to take advantage of low prices with the slide in the U.S. Dollar. Egypt moved for wheat with Dec delivery in mind. Japan finalized its regular tender, buy 132k tons of wheat, including 90k US origin. Jordan moved for wheat yesterday. Bangladesh, Algeria and Morocco all remain around the market. Australian wheat stocks recorded their largest fall in 3 months, CBH confirmed this by saying it will have shipped 85% of the grain delivered to it by the end of this month, with a 15% cushion as the next season's harvest begins in the region. New currency strength in the Aussie may limit their competitiveness going forward. HRW basis is flat while freight remains firm. SRW Basis firmed ever so slightly with hope that the U.S. would compete for Egyptian business. Wheat output in Argentina for the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires Grain Exchange. The long term average size of the crop is 14.8 mln mt. Strategie Grains lowered its EU soft Wheat production figure to 129.0 mln mt from the prior month's 130.2 mln mt, but notes that supplies in the EU remain abundant. Look for buyers to move back into the market on signs of weakness. The market has factored in the huge world wide ...

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• Publié par: Tebib
• Nombre de lectures: 11
• Langue: English

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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

An intra-day high of $5.30 was achieved in trade yesterday, a key objective on most technicians' charts.

Wheat sold off quickly and struggled to remain positive through the close.

Major importers of wheat are

looking to take advantage of low prices with the slide in the

U.S. Dollar. Egypt moved for wheat with

Dec delivery in mind.

Japan finalized its regular tender, buy 132k tons of wheat, including 90k US

origin. Jordan moved for wheat yesterday.

Bangladesh, Algeria and Morocco all remain around the

market. Australian wheat stocks recorded their largest fall in 3 months, CBH confirmed this by saying it

will have shipped 85% of the grain delivered to it by the end of this month, with a 15% cushion as the

next season's harvest begins in the region. New currency strength in the Aussie may limit their

competitiveness going forward.

HRW basis is flat while freight remains firm.

SRW Basis

firmed ever

so slightly with hope that the U.S. would compete for Egyptian business. Wheat output in Argentina for

the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires Grain Exchange.

The long term

average size of the crop is 14.8 mln mt.

Strategie Grains lowered its EU soft Wheat production figure to

129.0 mln mt from the prior month's 130.2 mln mt, but notes that supplies in the EU remain abundant.

Look for buyers to move back into the market on signs of weakness.

The market has factored in the

huge world wide supplies and for the time being the focus is the weak U.S. Dollar, fund influence and

weather concerns should they arise. Buying Corn – Selling Wheat becomes attractive at 130 premium in

the DEC but don’t be surprised if we test 145 to 150, objective is 100.

Overnight markets continue to see increased volume with Chicago trading 4327 contracts in the DEC.

Chicago closed down 7 1/2 cents. Kansas City finished overnight trade down 4 3/4 cents and MPLS

closed down 6 1/4 cents. Kansas City/Chicago spread is trading at 13 3/4 cents. The MPLS/Chicago

spread is at 29 1/2 cents. Euronext (Matif) Milling Wheat continues to gain with a last trade at $5.12/bu

USD in the Nov.

Globex Overnight

Contract

Last

Net Change

High

Low

Volume

ZWZ9

505^4

-7^4

512^6

504^0

4327

ZWH10

524^4

-7^4

530^4

523^6

1322

ZWK10

536^4

-8^2

540^6

536^4

9

ZWN10

549^0

-6^6

555^0

547^0

259

KEZ9

519^2

-4^6

523^0

518^6

980

KEH10

534^6

-4^4

538^6

534^6

78

MWEZ9

535^0

-6^2

539^6

535^0

172

MWEH10

553^4

-3^2

555^0

553^4

18

Early Opening Calls: off 5-7 cents

Top News

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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.

-- Egypt's GASC tendering for 30k-60k tons of optional origin wheat, late Nov or early Dec shipment

-- Total UK wheat exports in the beginning months of the 09/10 marketing year were placed at 265,767

mt in customs data, well above the same period a year ago when exports were 186,514 mt

-- Spain takes in just over 57,000 mt of UK Wheat during August, out of the 100,000 mt the UK

exported during the month, acc. to British customs data

-- Wheat output in Argentina for the 09/10 season was estimated at 7.5 mln mt by the Buenos Aires

Grain Exchange.

The long term average size of the crop is 14.8 mln mt.

-- US & Canadian wheat grower groups along with flour mill assoc. are meeting in KC a topic of

discussion at the meeting is GMO Wheat acceptance in the domestic & international market place

-- Overall harvest in Alberta is 91% complete, durum wheat is 99% done, while 93% of spring wheat is

finished also, acc. to the province's ag dept.

-- In a rebalancing act, an Ag exchange traded fund run by Deutsche Bank is expected to sell off

between 10-15,000 contracts of Corn & Wheat futures.

-- 132,000 mt of Wheat was bought by Japan's AG Ministry on Thursday inline with the announced

volume, acc. to ministry official.

The grain is for shipment in December

-- 50,000 mt of mill grade Wheat is being re-tender for by Algeria on Thursday, acc. to merchandisers.

The grain would be for November delivery

-- Strategie Grains lowered its EU soft Wheat production figure to 129.0 mln mt from the prior month's

130.2 mln mt.

The latest figure would put the 2009 crop 8% below last year's.

-- Strategie Grains however raised its EU Wheat export figure to 16.2 mln mt from the prior month's

15.2 mln mt on better overall global trade conditions

-- CBH of Western Australia says it will have shipped 85% of the grain delivered to it by the end of this

month, with a 15% cushion as the next season's harvest begins in the region

-- USDA's cattle on feed report will be released on Friday, Oct 16th, at 2 pm CDT.

Analysts expect the

on feed number as of Oct 1 at 100.0% of year ago, while Sept placements of animals is expected at

105% and marketings in Sep at 98%

-- Pending Tender: Total of 125,000 mt of various Wheat scheduled for export sale tender by Turkey on

October 15th, acc. to the country's state news agency.

They'll sell 50k mt of red mill Wheat, 50k mt of

white mill Wheat & 25k mt of durum.

-- Pending Tender: Oct 22nd is bid deadline in 200,000 mt Wheat buy tender floated by Morocco's state

grainary.

Delivery is expected by December 15th, acc. to traders

-- 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

-- Liffe Nov milling wheat futures were off -2.25 euro at 126.25 euros/mt.

-- Globex Wheat Vol. 70,193; Pit Vol. 3,834; Open Interest Change: + 451

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

-- Outside markets: Energy Complex -0.04 at $75.14; Gold & Silver: -14.6 at $1050.1 & -0.453 at

$17.455; US $ +0.165 at $75.890

Cash Markets

-- CIF SR Wheat steady. Oct. -20 to -10 Nov. -5 to +7 Dec. -5 to +15

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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