04-18-2012 07:26 AM - edited 04-18-2012 01:59 PM
At the close:
The July corn futures closed 13 1/4 cents lower at $5.94. The July soybean contract settled 18 cents lower $14.13 3/4. The July wheat futures finished 4 1/2 cents lower at $6.15 3/4. The July soymeal futures closed $3.40 per short ton lower at $393.90. The July soyoil futures finished $0.56 lower at $55.60.
In the outside markets, the NYMEX crude oil is $1.56 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 60 points.
The July corn futures trade 8 cents lower at $5.99 1/4. The July soybean contract is trading 13 3/4 cents lower $14.17 3/4. The July wheat futures are trading 1 cents lower at $6.19 3/4. The July soymeal futures are trading $4.30 per short ton lower at $393.00. The July soyoil futures are trading $0.33 lower at $55.83.
In the outside markets, the NYMEX crude oil is $1.36 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 47 points.
One analyst says, "There's been talk all week that 1.5 to 3 million acres will shift from corn to beans. Whether fact or fiction, that talk is there. Weather looks good for planting progress, but if some models are correct on the Midwest being dry into May 1, traders may see extremely dry areas get worse with poor emergence on early corn. Theses lows today could be a near term low, until acres and weather play their roll."
At the open:
The July corn futures trade 1 cent lower at $6.06 1/4. The July soybean contract is trading 15 1/4 cents lower $14.16 3/4. The July wheat futures are trading 1/2 of a cent higher at $6.20 3/4. The July soymeal futures are trading $4.20 per short ton lower at $393.10. The July soyoil futures are trading $0.36 lower at $55.82.
In the outside markets, the NYMEX crude oil is $0.27 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 47 points.
USDA announces Wednesday that China bought 120,000 mt of U.S. soybeans for 2012-13.
The trade is still reacting to yesterday afternoon's USDA Crop Progress Report that showed 17% of the U.S. corn crop planted.
One analyst says, "I think the trade was way too fast with this. The weather is nice, but not that nice. Producers in the north still worried about the potential for cold, and many guys were waiting for another rain in Iowa and Minn before going after it. West Wisc too. 17% is still pretty fast, and I kind of figures with the weather not super nice last week that the trade was over estimating the pace."
Early calls: Corn 1-2 cents lower, soybeans 9-11 cents lower, and wheat mixed.
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.06 per barrel higher.
Wall Street=Seen trading lower following lower earnings reports.
World Markets=Asia/Pacific stocks are higher, while Europe's stocks are lower.
More in a minute,
04-18-2012 07:32 AM
There is news from the CME Group this morning. The Exchange is starting a Black Sea wheat contract. What do you think about this?
Here is the press release on it:
CME Group, the world’s leading and most diverse derivatives marketplace today announced the launch of CBOT Black Sea Wheat Futures to begin trading on June 6, subject to regulatory approval. The launch of these contracts, which will be listed with, and subject to, the rules and regulations of the CBOT, is an extension of the MOU that was initiated by CME Group Chairman Emeritus Leo Melamed last year.
“This is an important next step for CME Group as it relates to our new market development efforts in Eastern Europe,” said Melamed.
“Now more than ever the world relies on the Black Sea region to produce wheat and other grains to meet our growing global demand for food,” said Tim Andriesen, Managing Director, Agricultural Commodities and Alternative Investments, CME Group. “That’s why beginning in June, CBOT Black Sea Wheat Futures will become the first hedging tool to offer regional market participants effective price discovery and risk management. We firmly believe this contract will not only establish an effective forward market for regional wheat prices, but has the potential to develop into a true regional benchmark pricing tool for wheat.”
Today, wheat is the world’s most internationally traded agricultural commodity with wheat exports at almost 140 million metric tons globally. In recent years, wheat produced in the Black Sea region has accounted for more than 20 percent of global exports. This resurgence, coupled with increased price volatility in the region has underscored the need for an effective hedging tool with strong correlation to the Black Sea wheat cash market.
CME Group has worked closely with regional partners, industry associations and several other key market participants to develop the region’s first wheat futures contract that truly represents physical grain prices, addresses specific delivery practices and regional risk factors like weather.
Pending all relevant regulatory review periods, Black Sea Wheat Futures will be listed on CBOT and available for trading electronically on the world’s leading wheat-trading platform, CME Globex, beginning with the first listed month of July 2012. The contract will be U.S. Dollar denominated and will be 136 metric tons per contract, similar to benchmark CBOT Wheat futures. Designated delivery points for the contract will be in Russian, Ukrainian and Romanian ports on the Black Sea, according to the CME Group press release.
04-18-2012 08:41 AM
I think the wise part of that is they are using tonnes but I can not understand why they would choose a contract size of 136 tonnes.
Why not use an even size such as 100 t or even 125?
04-18-2012 09:45 AM
CME wants contract volume, which has shrunk 40% year on year (a reason why the idea liquidity makes for a bubble doesn't hold up for grain). Also, BS wheat is going to be more volatile by the very nature of the area, which is not a consistent producer.
CBOT needs more 'action' and this is a roulette wheel attempt to drive interest. Why SRW contract doesn't cover that issue is really quite an interesting perspective. I'd be fascinated if they let producers actually deliver against the contracts - which they would not allow on principle. But then they'd have an interesting product.
04-18-2012 10:13 AM
Considering the stocks and stock to use in corn are the lowest in quite some time yet prices are roughly two bucks lower would suggest that volume and liquidity do hold up well for grain and bubbles. The July KW contract is at its lowest point since July of 2010.
04-18-2012 11:45 AM
Canook: 2200#s / ton, divided by 60#'s / bu, times 136 gets you very close to 5000 bu = standard contract in Chitown. (4986.66 bu)
04-18-2012 12:06 PM
Hobby; what you are missing is the rest of the world uses kilograms/tonnes they do not care how many 56 or 60 lb units you have.
That is what I was pointing out if they are looking for business from the Black Sea then talking their language, tonnes, makes sense. Indeed it would seem to me a lot of traders in the US would like that too since they sell and ship on the international market in tonnes but then after using tonnes they make the contract a weird number 136t. Now unless there is a reason that I do not know for using a strange number like that I question why they did not use a easier number to calculate from unless they are just used to using strange measurement units like 56 and 60 lbs and can not see the efficiencies in a round number like 100t.
04-18-2012 01:17 PM
Canauk: I was not arguing. I was just pointing out what that # must represent. They are from Chi Town just like Obummer they think the world and everything else revolves around them. Nothing would please me more than to have it fall on it's face. Especially after their MF global thing they were supposed to be policing.
I personally think it is a queer number too. They are obviously set in their ways to trade 5000 bu lots.