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12-27-2011 07:49 AM - edited 12-27-2011 05:08 PM
By now, I'm sure you've seen the closing prices (Sorry...got caught up with some family stuff this afternoon -- still entertaining the whole crew after the birth of our daughter the other day...I'm about ready to crawl into a cave!), but if not, here they are: At the close, March corn was 13 3/4 cents higher at $6.33 1/4 per bushel, March wheat was 22 3/4 cents higher at $6.44 3/4 and January soybeans -- the day's leader to the upside -- ended Tuesday 36 3/4 cents higher at $11.99 3/4.
It sounds like things are going to continue to trend higher all this week. But, do you think traders will trim these gains by taking some profits later on in the week?
Hey, at any rate, thanks for playing along with the B-Team again today. We'll keep things as lively as we can tomorrow too! Stay tuned!
Have a great evening! See you here in the a.m.!
March corn has shot 13 cents higher at $6.32 1/2 per bushel, while March wheat is 20 cents higher at $6.42. So far, beans are leading the charge, though, Tuesday; the January soybean contract is nearing the $12 mark, trading 34 cents higher at $11.97 per bushel.
Just chatted with Don Roose with U.S. Commodities over in West Des Moines. He had a lot of good points on this rally. Most of what he said is in here.
One thing I didn't include in that story, though, is one big indicator -- while all the hype here has been that we were likely to have this big rally today, coming after a 3-day weekend with basically a singular focus on this S.A. weather situation, Don said that wasn't necessarily a given, for one big reason: While we took a break from trading here in the U.S. yesterday, the Chinese market was still running. And, he said in those 2 extra days they've been trading while the CME hasn't been, corn was unchanged and beans were slightly lower. So, that's why today's early calls weren't super high -- there was reason to believe there may not have been the big momentum we're seeing this morning.
So, does that mean China's just ignoring the S.A. weather situation, or is there reason to believe this rally's not as long-legged as we think it might be? And, what's going to take the steam off this rally first: Profit-taking, improved S.A. weather, a return of the focus on the grain fundamentals, namely the demand picture, or outside factors like the Eurozon debt situation?
Oh yeah, and one more thing -- looks like we're going to have a repeat of this last 3-day weekend. There will be no overnight trade on Monday night (Monday's closed on account of the New Year's holiday), so the trade will open again on Tuesday morning at the normal time after the close Friday afternoon.
Buckle up! It's going to be a wild one today! The grains opened sharply higher: March corn started the day 9 3/4 cents higher at $6.29 1/4 per bushel and March wheat started 8 cents higher at $6.30. January beans, tracking the South American weather situation the closest, opened Tuesday 19 cents higher at $11.82 per bushel.
So, are we going to see $12 beans today?
La Nina's driving the bus today, and it looks like it's got rockets duct-taped to its sides today!
More from the Mortensens here on the weather situation in South America:
Given the weather market that has developed for corn and soybeans, this means an uncomfortably long period of time (and many weather model runs) before the next chance to trade. Therefore, look for wild trade on Tuesday based on weather forecasts.
Opening prices here in a couple minutes...
Well, everybody survive Christmas? My house is still awash in Barbie dolls and princess stuff! But, we had a great one! Hope you all did too!
Anyway, on to today's racket! Unfortunately, the B-Team's covering things again this week, so again, if the markets go higher all week, it's because I'm in, and if they go lower, it's because Mike's out! Deal? Looks like corn and beans are going to start today slightly higher, but there's still some weakness in wheat, so it may start in the red. Look for corn to start 2-4 higher, soybeans 3-5 higher and wheat 1-3 lower.
Interesting discussion building here in Marketing Talk about $12 beans -- will we break that barrier this week? What do you think? And remember, Mortensens told us last week that we very well could see a pretty volatile week of trading this week.
More in a few...
12-27-2011 07:54 AM
The most important items for South America include:
Everything went as planned during the past week with the 4-day heat
wave and lack of widespread, major precipitation across Argentina, S.
Brazil, Uruguay, and Paraguay. The most significant rain (greater than 25
mm/1.0") occurred Dec 22-24 across northeast Argentina, far southern
Paraguay, northwest Uruguay, and extreme S. Brazil with isolated totals
above 75 mm/3.0".
The big picture forecast remains unchanged as a warm bias and below
normal precip continues during the next two weeks across Argentina, S.
Brazil, Uruguay, and Paraguay. This pattern is the result of ridging of
high pressure oscillating between Chile/W. Argentina and the eastern
Pacific Ocean. As a result of the forecast, we continue to have
increasing concern for summer crops, especially any pollinating corn. Our
only forecast difference is a delay in the more extreme heat (widespread
95+ F/35+ C) as it now looks to build back into Argentina/S.
Brazil/Paraguay over the New Year's weekend and the first week in January.
Over the long holiday weekend, model guidance has trended even drier
for Argentina during the next two weeks while debate continues for
precipitation in S. Brazil over the New Year's holiday weekend. The GFS
model is drier than the European model and our forecast is more in the GFS
camp versus the European model camp.
In Brazil, below are the specifics for this week (Dec 25-31):
Southern belt (RGDS, SC, Parana): 35% coverage receiving 10-50
mm/0.4-2.0", timing of rain is Tuesday/Wednesday with isolated activity
and possibly more widespread on Saturday, max temps generally in the mid
80s to low 90s F with possibly some mid 90s F on Friday and Saturday
Northern belt (Mato Grosso, Mato Grosso do Sul, Goias, SP, Minas
Gerais): 80% receiving 25-75 mm/1-3" with highest totals in Mato Grosso,
northern Mato Grosso do Sul, Goias, and Minas Gerais
Below are the specifics for next week (Jan 1-7)):
Southern belt (RGDS, SC, Parana): 35% coverage receiving 10-50
mm/0.4-2.0", brief cool down to start of the week with 90s F returning for
middle to end of week
Northern belt (Mato Grosso, Mato Grosso do Sul, Goias, SP, Minas
Gerais): 75% receiving 25-75 mm/1-3" with highest totals in southern Mato
Grosso, Mato Grosso do Sul, and Sao Paulo
In Argentina, below are the specifics for the next two weeks:
Week 1 (Dec 25-31): 15% coverage (decrease from 35%) receiving 10-30
mm/0.4-1.2" with a bias west and far north (Cordoba, Santiago Del Estero,
Salta, and Formosa), timing of rain is Thursday/Friday, max temps will be
mid 80s to low 90s F through Thursday with 90s/low 100s F Friday and
Week 2 (Jan 1-7): 15% coverage receiving 10-30 mm/.4-1.2", timing of
rain is Jan 6-7, highs in 90s F/low 100s F Jan 1-4
12-27-2011 09:17 AM - edited 12-27-2011 09:21 AM
Great breakdown of the weather outlook there. You are tapped into the weather picture nicely. Is it possible for you to take a picture of some of this corn or soybean crop that is short on rain? Is there a corn or bean field close by? A lot of folks would like to see just what the conditions look like. If you need help posting a picture, just let us know, it's fairly simple. But, a big thanks for your updates, they are interesting to read.
Separately, it looks like the USDA reported Tuesday a 60,000 metric ton soybean sale to China. And it's a sale for 2011-12 delivery. Could this be the start of China buying huge amounts of U.S. soybeans in 2012?
12-27-2011 09:36 AM
The effects of dry weather in Rio Grande do Sul began to be felt in soybeans. According to the newsletter Conjectural Emater released last Thursday , water deficiency affects the early development of plants and seed germination. These stages represent 94% of the total area to be sown in the state, 4.1 million hectares. The rest is waiting for rain to be able to be sown . According to the technician from Emater , Ruger Alencar, the losses are not yet measurable. However, in the Northwest, producers feared the worst. According to the president of the Union of Rural Workers and Puerto Tuparendi Maua, Oscar Avrello, unlike last year, who planted in early , his filed did not get along. Soybean farmers from two municipalities, which account for 10 000 ha, must have reduced productivity of 50 bags / ha to 40 bags / ha, as the crops are in blooming stage..
12-27-2011 10:06 AM
...OK, so far so good. But this is Tuesday...can we end up with a Turnaround Wednesday this week?..Or is the weather and sales information strong enough to pull us up all week.? And do we have a shortened session Fri.? And no electronic next Sunday night like this week?
12-27-2011 10:16 AM
Even if weather conditions improve in the coming days, the yield potential has already been affected in southern Mato Grosso do Sul, south of Sao Paulo and in virtually all regions of the three states of the South in Brazil.
In Argentina, also smaller harvest is expected due to lack of rain. The forecast supply and demand worldwide USDA released in early December already pointed an ending inventory / demand by 14.6%. Although better than in November, this relationship is still the lowest since 1973/74.
Farmers in Mato Grosso do Sul are concerned about the possibility of an important loss of the soybean crop because of drought. In some regions of the state, it hasnt rained for at least 40 days . While producers provided an estimated loss of up to 40% of the productive potential of their crops, optimistic weather expectations indicate that only in January rains are back to normal.
According to the president of Aeagran (Agricultural Engineers Association ), Bruno Tomasini, several regions have been punished with drought. He said producers who used to harvest 50 to 60 bags per hectare will have to redo the math ( 1 bag = 60 kgs).
"What you can see is that we reduced the productive potential of some crops," says Tomasini. He believes that it is too early to estimate losses, but acknowledges that the loss is inevitable. "Actually, it is expected a return of rains to recover at least some of the production."
Still, weather forecasts are not very good. According to meteorologist Natálio Abraham, an estimated 180 mm of rainfall for December is far from real. "It would have to rain 25 to 30 mm in the next five days," he adds. "Corumba was not even 10% of the predicted rain in the month and Marazion did not reach 30%."
Erny Agostini da Silva, 31, who farms 370 acres of soybeans in the region of Amambai. Said , he got 36 dry days . 'Since the 15th day without rain you can see that the plant is suffering "he says. The farmer estimated loss of up to 40% productivity. "In good years, with good price, this is the producer's profit," he says.
For the president of the Union Amambai Rural and Regional Vice President of the South of the Border Famasul (Federation of Agriculture and Livestock), Cristiano Bortolotto, losses are inevitable. "Sure there is a loss , some places huge losses," he says. According to him, in Colonel Aral Moreira and Sapucaia have almost 40 days without rain. "In time of drought, the temperature is too high and the plant does not stand."
Bortolotto said other areas affected due to drought recorded rainfall last weekend. "On Saturday some areas got rain and some do not. In Sapucaia ranged from 60 to 5 mm, "he said.
Even so, Abraham points out that these are not enough rainfall to recover the plants. "It was mainly fast-rain than do nothing to farming".
12-27-2011 06:23 PM
Who needs enemies! LOL Realy Jeff when does Mike get back I need lower prices!
ANd if those Brazilians would just adapt our USDA way of figurin yields this drought they are having would mean increased yields!
I'll bet their cows will get that extra 2.5% milk YOY they have been forcasting too!