The Morning Crush by ghkgkyyt

VIEWS: 8 PAGES: 2

									                                              “The Morning Crush”
                                                      October 11, 2010
                                                            Kent Woods
                                                          Leticia Zaragoza
                                                        Office 312/624-7891
                                                        Headset 312/789-8403


Market Factors
Sharply higher…corn has led the charge with this market making the biggest 2 day move since 1988…there will be concern today
about are we shutting off the demand side of the market…but money flow supports the higher prices right now and the tight grip
does not look over…there will also be margining concerns today as it is a banking holiday in the northern and southern
hemispheres in observance of Columbus day..

Financial and Energy markets…the US dollar is under pressure this morning on the thought that the US Fed would continue their
easing policies by pumping more funds into the market…helping to bolster energy and commodity prices in general…China also
announced the move to increase the amount of funds that the banks must hold in reserve which serves to tighten their monetary
policy…

Deliveries
             Meal                 206                   Oct 08, 2010
             Oil                  1,186                 Oct 08, 2010

October Open Interest
         Meal                     1,042                 -357
         Oil                      1,796                 +35


Crush and Oil Share
The USDA took the trade by surprise and it created a Friday trade that was one of a kind…and we will not likely see that happen for
some time to come…how many times would we see a locked limit day going into possibly the best harvest weekend in years…ideal
weather for harvesting with crops mature for harvesting across the entire US….combines are rolling…heavy activity…truck lines
everywhere…processors and elevators are full of corn and beans and trying to find a place to put the crop…weather has been so dry
for the harvest period thus far that we have not had a break to move the crop around…processors are plugged…

With the market locked limit for the entire trading session on Friday, the options pits became futures pits…this kept the outside world
from really seeing where the markets were trading…the futures were locked but synthetics were trading actively…it did make it nearly
impossible to leg crush though…but note that it wasn’t a complete shutout though…and one would think that products would have
struggled to keep up with beans leading a rally…but crush traded at the recent highs of 70 cents…commercials as they buy beans
want to continue to crush into the crush strength…note that the settlements are higher due to the skew of the values of the markets
being locked limit…

It may take a few days to get the market settled down from the big activity on Friday…it may provide for some swings and trading
ranges for the crush….bracket markets and relationships looking for opportunities…trade extremes…

As the beans are swinging around this morning and last night, it has caused the crush to swing in quite a trading range…the Dec has
traded between 68 ½ and 71 ½…there has been 2,100 Dec crush trade as of the writing of this wire…at 6:25 a.m…today will provide
for plenty of activity…

Important Dates
Oct 12 Crop harvest progress
Oct14 NOPA crush report
Oct 14 Last trading day for the Oct futures

Oil Share             10/8        10/7        10/6      10/5       10/4       10/1        9/30       9/29       9/28        9/27
Dec10                 42.44       42.69       42.53     42.26      42.64      43.05       42.35      41.95      42.14       41.60
July11                42.46       42.70       42.55     42.22      42.49      42.89       42.26      41.92      42.08       41.56
Dec11                 43.68       44.01       43.93     43.64      43.94      44.44       43.80      43.38      43.69       43.29

Crush                 Bid         Offer       10/8      10/7       10/6       10/5        10/4       10/1       9/30        9/29
Oct10                 50          60          73.90     59.09      57.36      55.20       53.70      49.93      49.57       51.16
Dec10                 69          70          73.46     71.96      70.34      68.73        67.01     62.91      64.42       66.34
Jan11                 65          66          69.73     68.23      66.39      65.14       63.39      59.98      62.46       64.05
Mch11                 65          66          69.40     67.90      66.64      65.97       63.91      60.31      63.49       64.80
May11                 64 ½        65 ½       69.80       68.30      67.17       66.09      63.98       60.80      64.57       65.58
July11                64          66         68.47       66.97      66.64       65.37      63.15       60.51      64.76       65.66
Dec11                 70          75         88.55       74.05      73.74       71.72      69.25       67.17      71.76       75.86


           V/Z                    - 15                   - 12
           Z/F                    +3 ½                   +4 ½
           Z/K                    +3                     +4
           Z/N                    +3                     +4
           F/H                    -1 ½                   +1
           F/K                    -1                     even
           F/N                    -1                     even

Crush Daily Totals
Reverse                                                  Crush

Oil Share Daily Total

Crush Option Trade

Weekly Crush Trade                10/4 through 10/8
Month                  Wkly Ttl                 Wkly High            Wkly Low               Last Trade             Last wk range
Oct10                  0C                       0                    0                      50                     58          47
                       0R
Dec10                  5,250C                   70                   66 ½                   69                     72 ¾        60
                       450R
Jan11                  1,050C                   66                   64                     65                     69          59 ½
                       200R
Mar11                  200C                     65 ½                 65                     65 ½                   66          60
                       0R
May11                  1,100C                   66                   65                     65 ½                   67          59
                       400R
July11                 100C                     66                   64                     66                     70          60
                       0R
Aug11                  0C                       0                    0                      75                     75          75
                       0R
Sept11                 0C                       0                    0                      82                     0           0
                       0R
Oct11                  0C                       0                    0                      80                     0           0
                       0R
Dec11                  0C                       0                    0                      80                     0           0
                       0R
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