Today’s Grain Future

Corn futures were up 1 ¾ to 7 ¾ today. USDA put Weekly Export Sales for the week ending May 23 at 875,300 MT. That was above trade expectations. The weather forecasts also continue to be quite wet for the afflicted areas along the Canadian border and in states touching the Mississippi River. More producers are deciding to take the prevent plant crop insurance payment and forego the production risk. Those with cattle are more likely to plant late and not worry about reaching full maturity, just trying to get silage. Silage acres are not counted as harvested for grain.

Jul 13 Corn closed at $6.62, up 7 3/4 cents,
Sep 13 Corn closed at $5.97 1/4, up 5 1/2 cents,
Dec 13 Corn closed at $5.67 1/4, up 4 1/2 cents
Mar 14 Corn closed at $5.77, up 4 1/4 cents

Soybean futures backed off in the last hour, but still settled 11 to 15 ½ cents higher. Meal was up $6.40/ton and soy oil lost 20 points. USDA reported net US soybean weekly export sales had a net reduction of 108,000 MT due by Chinese and unknown destination cancelations that totaled 236,300 MT. Net sales for the 2013/14 marketing year were for 756,600 MT for the week ending May 23. The soybean meal export sales total was 190,100 MT, 40,900 MT of which is slated for delivery in the next year, while soy oil net sales were 2,900.

Jul 13 Soybeans closed at $15.10, up 14 1/4 cents,
Aug 13 Soybeans closed at $14.37 3/4, up 11 cents,
Sep 13 Soybeans closed at $13.47 1/4, up 13 cents,
Nov 13 Soybeans closed at $13.04 1/4, up 15 cents,
Jul 13 Soybean Meal closed at $447.20, up $6.40,
Jul 13 Soybean Oil closed at $48.38, down $0.20

Wheat futures were higher on all three exchanges today, pulled higher by corn and a solid weekly Export Sales report for wheat. Trade guesses for the USDA weekly Export Sales report ran 300-700,000 MTs. Nearly all of that total was expected to be new crop, as the old crop marketing year ends Friday for wheat. That was the case. USDA indicated that net sales for the week were 764,200 MT, of which 35,900 MT was old crop business and the rest for shipment after June 1. The discovery of GMO wheat in Oregon is having ripple effects in the export business. The EU is recommending testing of soft white wheat imports to assure that they are non-GMO. Japan has withdrawn import tenders for white wheat from the US. Taiwan and South Korea are also suspending purchases on a mill by mill basis until USDA figures out how widespread the issue is.

Jul 13 CBOT Wheat closed at $7.05 1/2, up 6 3/4 cents,
Jul 13 KCBT Wheat closed at $7.51, up 5 cents,
Jul 13 MGEX Wheat closed at $8.20, up 4 1/2 cents

Oryza U.S. Rough Rice Recap – Market Remains Firm, Despite Decreasing Export Sales

The U.S. cash rice market remains firm despite export sales decreasing for the second consecutive week. However, there was very little trade activity to speak of today as buyers and sellers remain about $0.50-$0.75 per cwt (about $11-17 per ton) apart. Some analysts were concerned by the heavy rain that passed across part of Arkansas last night, fearing that it could reduce field yields and force farmers who were planning on planting their remain acres with rice to reconsider in favor of a different crop.

As of today, offers from farmers were could still be found around $16.25-$16.50 per cwt fob farm (about $358-$364 per ton) for 50 pounds of whole rice or better for June shipment while offers from resellers were unchanged as similar levels.

Bids from some mills increased to around $15.00 per cwt (about $331 per ton) for June delivery which generated zero selling interest while bids from smaller mills and exporters increased to around $16.00 per cwt (about $353 per ton) for June delivery although there were rumors that at least 1 barge traded around $16.10 per cwt (about $356 per ton) however this is believed to be for domestic consumption.

In the meantime, today the USDA reported that for the week ending on May 24, U.S. rice exporters sold 34,000 tons, which was 42% lower than last week and 45% lower than the prior 4-week average, with the primary destinations including: 17,200 tons to Mexico, 8,000 tons to Taiwan, 1,600 tons to Jordan, 1,200 tons Canada, and 1,100 tons to South Korea.

U.S. rice exporters shipped 27,900 tons, which was 43% lower than last week and 66% lower than the prior 4-week average. The primary destinations included: 8,500 tons to Haiti, 5,800 tons to Taiwan, 3,200 tons to Colombia, 2,600 tons to Mexico, and 2,400 tons to Saudi Arabia.

Won Completes a Fourth Weekly Decline on Fed Concern; Bonds Fall

The won completed a fourth weekly loss as South Korean importers bought dollars to pay month-end bills and amid concern the Federal Reserve will taper stimulus policies that have spurred fund flows into emerging markets.

Fed Chairman Ben S. Bernanke said last week the central bank could reduce the pace of its monthly bond purchases if there are signs of sustained improvement in the U.S. economy. Data this week showed consumer confidence in the world’s largest economy at a five-year high. South Korean government bonds extended the week’s drop after Statistics Korea said yesterday that industrial production climbed 0.8 percent in April from March, the first increase this year.

“Importers must have bought more dollars today as it’s the last day of the month, pushing the won down,” said Yoo Hyen Jo, an analyst at Shinhan Investment Corp. in Seoul. “U.S. economic data added to concerns whether the Fed will taper its bond buying.”

The local currency dropped 0.2 percent today and this week to 1,129.64 per dollar in Seoul, according to data compiled by Bloomberg. It slumped 2.5 percent this month and touched 1,133.72 per dollar on May 29, the lowest level since April 11.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, declined 17 basis points, or 0.17 percentage point, this week to 9.08 percent. It fell seven basis points today.

Economic Outlook

Park Seong Dong, a director-general at Statistics Korea, told reporters yesterday it’s hard to say if the economy is showing an upturn yet. South Korean exports probably shrank 0.9 percent in May from a year earlier, according to the median estimate of 12 economists by Bloomberg News survey before data due tomorrow. That compares with a 0.4 percent gain in April.

Foreign funds bought more South Korean shares than they sold on all days except one this week, exchange data show. An index of manufacturers’ confidence jumped to the highest level in a year, the Bank of Korea said yesterday.

The yield on South Korea’s 2.75 percent government bonds due March 2018 rose six basis points today and 19 basis points this week to 2.89 percent, prices from Korea Exchange Inc. show. That’s the highest level for a five-year note since Feb. 4, data compiled by Bloomberg show.

To contact the reporter on this story: Yewon Kang in Seoul at ykang51

To contact the editor responsible for this story: Amit Prakash at aprakash1

US Economy

Treasuries Drop With Gold; Dollar Gains, Stocks Fluctuate

Treasuries and gold fell while the dollar rallied as better-than-forecast reports on business activity and consumer confidence bolstered speculation the Federal Reserve will scale back its bond purchases. U.S. stocks fluctuated at the end of a seventh straight monthly gain.

Ten-year Treasury yields increased three basis points to 2.14 percent and the Dollar Index, a gauge of the currency against six major peers, jumped 0.4 percent to 83.39 at 12:03 p.m. in New York. The Standard & Poor’s 500 Index swung between gains and losses near the 1,654 level, poised for a monthly advance of 3.5 percent. The Stoxx Europe 600 Index dropped 0.9 percent. The S&P GSCI gauge of 24 commodities slid for a third day, losing 0.7 percent as gold and oil fell more than 1 percent.

Government bonds are headed for the worst month since 2004 as investors weigh prospects that the Fed will taper asset purchases as the economy improves. Business activity in the U.S. rebounded in May, with the MNI Chicago Report’s barometer rising to 58.7 to exceed all forecasts in a Bloomberg survey and reach the highest since March 2012. The Thomson Reuters/University of Michigan final index of sentiment increased to 84.5 in May, the strongest since July 2007.

“This is actually saying the economy is expanding,” said Michael Franzese, senior vice president of fixed-income trading at ED&F Man Capital Markets in New York. “It puts the Fed in check. They are not sure what to do. Views are all over the place, legitimately.”

Bonds, Stocks

U.S. two-year note yields rose one basis point to 0.30 percent and 30-year rates increased four basis points to 3.31 percent. The dollar strengthened against 14 of 16 major peers, climbing 0.6 percent to $1.2975 per euro.

The seven-month rally in the S&P 500 is the longest stretch of gains since 2009. The gauge has retreated about 1 percent from a record high on May 21 as investor’s debate the Fed’s plans.

Another report today showed household purchases, which account for about 70 percent of the economy, dropped 0.2 percent last month, the Commerce Department reported. The economy grew an annualized 2.4 percent pace in the first quarter, down from a preliminary reading of 2.5 percent, government data released yesterday showed.

Alcoa Inc., Intel Corp. and DuPont Co. rose more than 1 percent for the biggest gains in the Dow Jones Industrial Average today. Pall Corp. retreated 3.8 percent after lowering its earnings forecast. American International Group Inc. slid 2.5 percent after saying it hasn’t received a deposit in the sale of its plane-leasing unit. Netflix Inc. rallied 2.1 percent on a report that it will be added to the Nasdaq 100 Stock Index in June. Dell Inc. climbed 0.8 percent as shareholders sued founder Michael Dell, the company’s board and private-equity partners over their bid to take the computer maker private.

Changes by MSCI Inc. to its global and U.S. equity indexes will be implemented at the close of trading today. The process known as rebalancing can lead to swings in affected stocks. The additions and deletions of stocks to gauges such as the MSCI All-Country World Index and the MSCI World Index of developed-market equities were announced on May 15.

Almost four shares retreated for every one that gained in the Stoxx 600 today, as 18 of 19 industry groups fell. The index has rallied for the past 12 months, the longest winning streak since 1997.

European Movers

Royal KPN NV, the Dutch phone operator, and Salzgitter AG (SZG), Germany’s second-largest steelmaker, dropped more than 4 percent as analysts downgraded the shares. PostNL NV rallied 6.9 percent after the Dutch mail-delivery company raised its profit forecast.

The MSCI Emerging Markets Index fell 0.7 percent, declining 3.2 percent in May, the most in a year. India’s Sensex slid 2.3 percent, its biggest daily slump in more than a year, after the economy grew less than 5 percent for a second quarter. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong sank 0.9 percent before a manufacturing report tomorrow.

To contact the reporters on this story: Michael P. Regan in New York at mregan12; Susanne Walker in New York at swalker33

To contact the editor responsible for this story: Lynn Thomasson at lthomasson

Today’s Grain Future

Corn futures closed ½ to 10 ¾ cents lower today. The weakness was confined primarily to the July contract. The weekly EIA ethanol report showed a slowdown in average daily production to 863,000 bpd. That was down 12,000 bpd from the prior week. Ethanol imports were recorded for the first time in 5 weeks, but ethanol stocks still declined to 16.0 million barrels. Gasoline consumption was the largest since August 2012, supporting ethanol use. Much of the selling interest in the July was index fund related as we enter the roll period for getting out of July longs. The trade is looking for net weekly export sales to be in the 500-800,000 MT range when released by USDA in the morning.

Jul 13 Corn closed at $6.54 1/4, down 10 3/4 cents,
Sep 13 Corn closed at $5.91 3/4, down 2 cents,
Dec 13 Corn closed at $5.62 3/4, down 3 cents
Mar 14 Corn closed at $5.72 3/4, down 3 cents

Soybean futures held on to most of their gains, with July 6 cents lower and November up ¾ cent. While there is plenty of time to plant soybeans in the US (most prevent plant dates are June 10 or later), the wet conditions in the central US are a threat to total acreage. There is also concern that late maturity of the wheat crop will result in fewer double crop acres. USDA weekly export sales data will be delayed until Friday because of the Monday federal holiday. Trade expectations are in the 300-800,000 MT range, with some old crop cancellation activity expected. This morning, private exporters reported to the USDA soybean export sales totaling 120,000 MT to China for the 2013/14 marketing year.

Jul 13 Soybeans closed at $14.95 3/4, down 6 cents,
Aug 13 Soybeans closed at $14.26 3/4, down 2 1/2 cents,
Sep 13 Soybeans closed at $13.34 1/4, up 2 3/4 cents,
Nov 13 Soybeans closed at $12.89 1/4, up 3/4 cent,
Jul 13 Soybean Meal closed at $440.80, down $3.50,
Jul 13 Soybean Oil closed at $48.58, down $0.05

Wheat futures lost 4 ¼ to 11 cents in Chicago today. KC was down 1 ¾ to up 1 cent. MPLS was ¼ lower to 2 cents higher. Japan cancelled a white wheat purchase tender due to the discovery of non-approved GMO wheat in an Oregon field. Japan bought 117, 035 MT of milling wheat, with 53,080 coming from the US. Planting delays are still supporting MPLS and to a degree KC wheat. Trade guesses for USDA weekly Export Sales report in the morning run 300-700,000 MTs. Nearly all of that total will be new crop, as the old crop marketing year ends Friday for wheat. The Export Sales report will be through May 23, so there is the possibility of some immediate shipment old crop business.

Jul 13 CBOT Wheat closed at $6.98 3/4, down 4 cents,
Jul 13 KCBT Wheat closed at $7.46, down 1 3/4 cents,
Jul 13 MGEX Wheat closed at $8.15 1/2, down 1/4 cent