04-29-2013 06:38 AM - edited 04-29-2013 03:27 PM
VIDEO Story: Are the commodity heydays over, analyst asks
On Monday, USDA says U.S. corn is just 5% planted vs. 49% a year ago and a 31% five-year average. Mike North, First Capital Ag senior market analyst, says the corn market rally, due to slower U.S. planting may be short-lived.
"The planting progress report is certainly a benchmark as to where we are in getting this crop in the ground. But, the market is going to react more to the weather forecasts. Last week, we saw warm weather take prices lower. This week, we are seeing cool, wet weather take prices higher. And a change in the forecast tomorrow, would rob us of what we saw today," North says.
Obviously, the U.S. planting is historically late. But, technology can help farmers plant the crop faster than ever, he says.
"We can plant 30% of the crop, or more, in a week. Because of our infrastructure, nobody is using the planting progress as a barometer for the markets, it's more about the daily weather forecasts."
A 10-month high trading percentage gain for corn. WoW!!!!
At the close:
The July futures corn contract settled up the daily 'limit' 40 cents at $6.59. The July soybean futures contract ended 27 cents higher at $14.08. July wheat futures closed 24 cents higher at $7.16 per bushel. The July soymeal futures finished $11.70 per short ton higher at $416.40. The July soyoil futures ended $0.03 lower at $49.51.
In the outside markets, the NYMEX crude oil is $1.50 per barrel higher, the dollar is lower and the Dow Jones Industrials are 122 points higher.
For tomorrow, the corn trade limits will rise to 60-cents. Some traders think this rally could be short-lived. Why? Well, synthetically, the July options only traded 1 1/4 cents higher than the limit. In March, on that limit down day, the market dropped another 17 cents, synthentically. And on other limit up days, the options went a lot higher. So, tonight's market activity could be interesting.
One analyst says that it's a full-fledged weather market.
"Corn has been the leader, with very little corn in the ground and little chance of making much progress this week and maybe next week too. We are having a couple of real nice days, but then back to the cold and wet stuff we have seen for like weeks," he says.
He adds, "So, corn is on fire and soybeans are keeping pace now after a slow start. Wheat is higher on the tour that should show losses this week. Corn is running the show here today and that is a delayed planting thing. Lots of spec buying seen today, some liquidation being seen now from specs. Farmers mostly hanging quiet."
The July futures corn contract is trading 32 cents higher at $6.51. The July soybean futures contract is trading 11 cents higher at $13.92. July wheat futures are trading 22 cents higher at $7.14per bushel. The July soymeal futures are trading $4.10per short ton higher at $408.80. The July soyoil futures are trading $0.16 lower at $49.38.
In the outside markets, the NYMEX crude oil is $1.29 per barrel higher, the dollar is lower and the Dow Jones Industrials are 67 points higher.
One analyst offers up his take on today's markets. He says, "Paper" has been buying large quantities of the short-dated new-crop calls which I think is a clear "weather bet/hedge". We also just had a huge exit of corn longs by the managed money over the last couple of weeks. Now that they are basically neutral in their net corn positions we are actually getting a real spring planting delay. It is very clear in the corn - bean ratio that this is all about the forecast. Many are associating this to 2008 which we feel is still too soon. We will be watching the morning and midday weather updates for direction."
Corn is up 20-cents, a one-month high. Soybeans are trading unchanged, while wheat is 9 cents higher.
At the open:
The July futures corn contract is trading 13 cents higher at $6.33. The July soybean futures contract is trading 1 cent higher at $13.82. July wheat futures are trading 6cents higher at $6.99 per bushel. The July soymeal futures are trading $1.30 per short ton higher at $406.00. The July soyoil futures are trading $0.19 lower at $49.35.
In the outside markets, the NYMEX crude oil is $0.32 per barrel higher, the dollar is lower and the Dow Jones Industrials are 53 points higher.
It looks like Midwest weather trending wetter will keep the corn market supported. Heavy rains could hit parts of the eastern Corn Belt, this week, delaying planting activity. The 6-10 day outlook is showing more rain. And you have to go out 11-days to see drier weather. Obviously, this isn't true for all farmers. But, large chunks of the Corn Belt could see further delays in planting. We'll see.
Early calls: Corn is seen 8-10cents higher, soybeans 1-2 cents higher, and wheat 4-6 cents higher.
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.35per barrel higher.
Wall Street=Seen opening higher.
World=Asia/Pacific stocks were higher and Europe's stocks are higher.
More in a minute,
04-29-2013 06:53 AM
Good morning Mike!
Just wondering what some of the thoughts of the traders are these days? It seems no one is worried about the nearby supply of the grains. Based on the overnights are thoughts of a smaller crop finally surfacing?
Here in NW Ohio, the corn planting would have to be less than 1% complete. We picked up another .8 yesterday. It's gonna take a while to dry out here.
04-29-2013 07:00 AM
04-29-2013 07:41 AM
Saturday -- Had a spreader and a sprayer running just south of me - I knew the guys well --so gave them a call and asked ---well how is it ? After a few --well huh's and this and thats - said they were pushing it BUT it was going to get wetter --- they were right - another half . Then rain thru next Monday -- Looks like they will running in the mud in Louisville .
BTW Roaring 1 - Looks like you will have some time to run over to Findlay to watch some sprinit cars
Double BTW Mowed the lard for the 4 th time already , lol
04-29-2013 07:42 AM
A wetter forecast has hit the desks of the forecasters. So, it's becoming more likely those additional days of delays could be realized. You're right, keep an eye to the sky.
04-29-2013 07:45 AM
Thanks for the kind words. Here are one floor trader's thoughts on this market. Jeff Coleman, Trean Group analyst and floor trader says, "Grains were active overnight as corn and wheat futures enjoyed a healthy up move and soybean futures saw some profit taking from Friday’s rally. July and December corn futures both opened around a nickel higher and powered upward 10-12 cents as the forecast of favorable weather for planting turned ugly as the Midwest is now expecting heavy rainfall for this week. Planting and yield concerns which waned at the end of last week are now back in play as the corn bears get a little nervous. The same concerns are now here for the wheat market though not as much as for the corn market. Wheat futures were trading a nickel higher for most of the night as the gains in corn and wheat futures are holding strong as we head into the opening of Monday’s day trading session."