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Wheat Comment 11-25-09

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Wheat Morning Update & Commentary Dollar weakness this morning has commodities on edge across the board. Wheat retraced almost 50% of yesterday's 20+ cent lower move during the night session. This type of volatility needs to be approached with caution, especially with the Thanksgiving holiday thinning the ranks of traders. Wheat remains strong technically and could be poised for a run at $6.00. Index funds need 6.30 just to break even on the re-balancing effort done last year. Naturally this run up in price and increase in shipping costs have left the U.S uncompetitive to North African and Middle East destinations. Weakness in the KC HRW market prompted Iraq to book 100,000 tons of HRW wheat. Ports at the Gulf and PNW remain chalked full of grain. Basis remains steady to weak across the country. Other nations, notably Australia have the similar issues. Japan Ag Ministry announced it bought 106,000 mt of Wheat under its regular tender rules Wednesday. They bought 21,000 mt of Canadian red spring & the balance of US white, red, & northern spring. Egypt's GASC announced yesterday it was seeking option origin wheat for delivery between Jan 5-20, results are expected later today. Analyst with Rosario exchange estimates 2.5 mln mt of Wheat have been approved for export by Argentina's gov't since late this summer, with 1.0 mln mt from new crop stockpiles, and the balance from old 2008 crop stockpiles. Overnight markets experienced normal to slightly ...

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Publié par	Phoiv
Nombre de lectures	14
Langue	English

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http://www.linngroup.com

Page 1 of 2

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

Dollar weakness this morning has commodities on edge across the board. Wheat retraced almost 50% of

yesterday's 20+ cent lower move during the night session. This type of volatility needs to be approached

with caution, especially with the Thanksgiving holiday thinning the ranks of traders.

Wheat remains

strong technically and could be poised for a run at $6.00. Index funds need 6.30 just to break even on the

re-balancing effort done last year.

Naturally this run up in price and increase in shipping costs have left

the U.S uncompetitive to North African and Middle East destinations. Weakness in the KC HRW

market prompted Iraq to book 100,000 tons of HRW wheat. Ports at the Gulf and PNW remain chalked

full of grain. Basis remains steady to weak across the country. Other nations, notably Australia have the

similar issues. Japan Ag Ministry announced it bought 106,000 mt of Wheat under its regular tender

rules Wednesday.

They bought 21,000 mt of Canadian red spring & the balance of US white, red, &

northern spring. Egypt's GASC announced yesterday it was seeking option origin wheat for delivery

between Jan 5-20, results are expected later today. Analyst with Rosario exchange estimates 2.5 mln mt

of Wheat have been approved for export by Argentina's gov't since late this summer, with 1.0 mln mt

from new crop stockpiles, and the balance from old 2008 crop stockpiles.

Overnight markets experienced normal to slightly below normal volume. Chicago closed up 11 1/4

cents. Kansas City closed up 12 1/2 cents and MPLS closed up 4 3/4 cents. Kansas City - Chicago

spread is now at - 2 1/4, Chicago premium to KC. The MPLS - Chicago Spread is now close to even

money. Matif Milling wheat is trading higher on the day.

GLOBEX Overnight

Contract

Last

Net Change

High

Low

Volume

ZWZ9

544^2

11^2

546^2

534^2

1760

ZWH10

565^2

11^6

567^0

554^4

1828

ZWK10

578^4

12^2

578^4

567^6

ZWN10

588^0

11^6

589^0

578^2

103

KEZ9

542^0

12^4

542^0

530^0

250

KEH10

558^4

12^6

558^4

545^4

473

KEK10

570^4

12^6

570^4

557^6

180

MWEZ9

544^6

4^6

547^4

540^4

MWEH10

568^4

9^6

568^4

558^6

109

MWEK10

577^4

6^2

577^4

Early Opening Calls:

10 to 12 cents higher.

Top News

**USDA reports private sale of 100,000 HRW Wheat sold to Iraq for the 09/10 MY

-- Japan Ag Ministry announced it bought 106,000 mt of Wheat under its regular tender rules

http://www.linngroup.com

Page 2 of 2

312.896.2001

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.

Wednesday.

They bought 21,000 mt of Canadian red spring & the balance of US white, red, & northern

spring

-- Egypt's GASC announced yesteday it was seeking nominal 55-60,000 mt Wheat cargo for delivery

between Jan 5-20, with tender results expected Wed., Nov 25

-- Analyst with Rosario exchange estimates 2.5 mln mt of Wheat have been approved for export by

Argentina's gov't since late this summer, with 1.0 mln mt from new crop stockpiles, and the balance

from old 2008 crop stockpiles

-- Itay's Ag Minister announced 09/10 Durum Wheat production dropped to 3.86 mln mt down 24.5%,

while Soft Wheat production was pegged at 3.08 mln mt a decline of 17.8% vs prior crop year

-- Experts on Wednesday said that Argentina will deploy two air force planes to contain locust plague to

control the insect in the country's largest wheat province. This year's wheat crop will be the smallest on

record due to droughts and export curbs.

-- Pending Tender: Japan's Ag Ministry announced 20,000 mt SBS feed Wheat tender, with bids due by

Nov 18th

-- Pending Tender: 100,000 mt optional origin Wheat tender was announced for November 24, by

Jordan's gov't, acc. to traders. Shipment was for Feb-Mar 2010

-- Pending Tender: Japan announced a November 26th SBS tender for 35,100 mt of food grade Wheat

for shipment between Dec - Jan

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

grainary, acc. to traders

-- Pending Tender: December 14th is date set for Bangladesh 100,000 mt Wheat tender, acc. to top

official with the agency to administer tender.

Delivery of the grain is for March 2010

-- Pending Tender: 60,000 mt opt origin Wheat tender bid deadline for Dec 30 was floated on Nov 18th

by Bangladesh.

Bids must remain valid until Jan 20th

-- eCBOT Wheat Vol. 86,602; Pit Vol.

6,526; Open Interest Change: -7,821

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

-- Outside markets: Energy complex: crude 10c higher, nat gas 10c higher ; Gold up $14 & Silver up

16c; US $ index lower, Yen, Euro, Swiss higher vs $

Cash Markets

-- CIF SR Wheat steady up 5 : Nov. +30 to +?? Dec. +30 to +?? Jan. +15 to ??

John Christopher

Linn Group

312.896.2061

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