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08-02-2012 06:18 AM - edited 08-02-2012 02:45 PM
At the close:
The Sep. corn contract closed 6 1/2 cents lower at $7.94, while the Dec. futures corn contract finished 4 3/4 cents lower at $7.95 3/4. The August soybean contract closed 29 1/4 cents lower $16.53, Nov. soybean futures settled 12 1/2 cents lower at $16.16. Aug. soyoil futures finished $0.18 lower at $51.79. The Aug. soymeal futures finished $13.50 lower at $523.70.
In the outside markets, the NYMEX crude oil is $1.51 per barrel lower, the dollar is higher and the Dow Jones Industrials are 108 points lower.
As the market's momentum has slowed, at least one floor trader says it's due to demand destruction. "For the corn market, it's all about demand destruction. Yields of 100,110,120 do not matter. There is no demand. This is coming from the bear camp. For soybeans, speculators are getting long the Aug. contract. No deliveries yet, as qx breaks 50 cents. I think we're seeing some 'back and fill', for both markets. I think we are going higher cz-900, sx-1800," he says.
So, let's take a look at demand destruction, so far:
The USDA has cut corn use, for next year, in the following categories:
100 million bu. less for ethanol
300 million bu. less in exports
650 million bu. less feed
35 million bushels less in crush
115 million bu. less in exports
Is that enough?
The markets remain in negative territory. Alan Brugler, Brugler Marketing & Management LLC president, says the move lower is mostly because of increased rain and rain chances.
"The rains mostly help soybeans, but also stabilizes corn yield. Corn use has also dropped off sharply, and export sales are almost non-existent," Brugler says.
He adds, "Some hedge funds are also making sales due to asset allocation rules (i.e., with the gain in July they have too much money in grains and need to move some of it to other investments)."
The Sep. corn contract is trading 5 1/2 cents lower at $7.95, while the Dec. futures corn contract is 4 1/2 cents lower at $7.96. The August soybean contract is trading 29 cents lower $16.53 1/4, Nov. soybean futures are 11 1/4 cents lower at $16.17 3/4. Aug. soyoil futures trade $0.27 lower at $51.46. The Aug. soymeal futures are trading $12.80 lower at $524.40.
In the outside markets, the NYMEX crude oil is $1.35 per barrel lower, the dollar is higher and the Dow Jones Industrials are 145 points lower.
At the open:
The Sep. corn contract opened 11 cents lower at $7.89 1/2, while the Dec. futures corn contract opened 9 3/4 cents lower at $7.90 3/4. The August soybean contract is trading 30 cents lower $16.52, Nov. soybean futures are 19 cents lower at $16.10. Aug. soyoil futures trade $0.30 lower at $51.43. The Aug. soymeal futures opened $12.90 lower at $524.30.
In the outside markets, the NYMEX crude oil is $1.60 per barrel lower, the dollar is higher and the Dow Jones Industrials are 29 points lower.
The overnight markets are still trading lower, as we head to the last half hour before pit trading.
FWIW: USDA Thursday revised lower its crop estimate for Europe. Today, USDA sees the 2012 Europe grain cropsize at 276.0 mmt, down 7% from its previous estimate.
USDA announces that Mexico bought 1.516 million metric tons of U.S. corn Thursday. This is separate from today's weekly sales report. Fresh sales and a huge one it is! Wow!
Weekly USDA Export Sales:
Corn=210,000 mt vs. the trade's expectations of 0-250,000 mt.
Soybeans= 224,000 mt vs. the trade's expectations of 350,000-600,000 mt.
Wheat=531,000 mt vs. the trade's expectations of 350,000-650,000 mt.
Soymeal= 224,000 vs. the trade's thoughts of 150,000-300,000 metric tons.
--INTL FC Stone has pegged the U.S. corn yield estimate at 124.3 bu./acre for a crop of 11.0 bill. bushels. The firm sees Iowa's yield at 134 and Illinois at 110. Harvested acreage is equal to the USDA's. For soybeans, the firm sees a national yield of 36.2 bu./acre totaling a crop of 2.73 billion bushels. A very good accountant would be needed to figure out the balance sheet, if this type of soybean crop is realized, Ag Resource analysts stated in a daily newsletter to customers Thursday.
What do you think? The estimates are certianly getting lower.
--Brazil exported 4.13 million metric tons of soybeans in July, up 10% from a year ago, according to a Dow Jones Newswire story. This story makes mention of calls for Brazilian soybean exports to stop, due to the shortage.
--The CME Group Thursday announced that it's daily volume for July was down 18% from a year ago. Of all contracts traded, 85% were executed on the Globex platform, according to a company press release. "CME Group agricultural commodities markets were particularly active in July with volume averaging 1.4 million contracts per day, up 46 percent compared with the prior-year period, as customers turned to CME Group to manage their risk associated with exceedingly dry and hot weather conditions in June and July. Contributing to this strong volume were two monthly average daily volume records in soybean and soybean meal futures and options contracts. In addition, agricultural commodities open interest reached a 2012 high of 8.8 million open contracts on July 26, which was up from 6.1 million open contracts at the beginning of January 2012 and up 23 percent versus the same period last year," the CME Group stated in the press release.
--A federal jury awarded Monsanto a $1 billion lawsuit decision against DuPont and its subsidiary Pioneer. See full story.
Early calls: Corn 5-7 cents lower, soybeans 18-20 cents lower, and wheat 10-12 cents lower.
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.34 per barrel higher.
Wall Street=Seen opening higher, ahead of the European Central Bank's Thursday announcement on whether it will support the eurozone with an austerity package.
World=Asia/Pacific stocks are lower, Europ's stocks are higher.
More in a minute,
08-02-2012 07:02 AM
The rains are falling for some areas of the Midwest, according to the Freese-Notis Weather Inc. radar. Out east, Wisconsin and Michigan are getting a nice drink too. Here's the western Corn Belt picture:
08-02-2012 11:05 AM
Argentina is looking at raising the export tax on soy to 40% from 35% to raise revenue. India is opening it's market to soy meal and taxing exports due to a reduced Monsoon that has left parts of the country dry. They are also a large exporter of sugar and this crop is being hit hard too.
The curious aspect of India importing soy meal is they are likely to get it via China because they currently have excess crushing capacity.
(OK, it's true. After making my nonprediction yesterday I'm trying hard to make it come true, thereby showing that how easy it is to see what one wants to see having made a nonprediction. If it doesn't come true today I'll work extra hard to make it come true tomorrow. I'm glad I'm not an advisor )
08-02-2012 11:27 AM
OK. I'm trying really hard.
China's wheat crop has been in more trouble tham many realized going through an early hot spell and later disease. Hints that wheat populations were too high for the conditions. Sounds like a government plan to raise production? Anyway, a 10 Million MT decrease in production forecast by people in the field. This will lower reserves to what I think the authorities believe is a minimum they can stand.
08-02-2012 01:26 PM
Mexico buys almost 60 million bushels of corn and they say there is no demand? End users can only wait so long....I think that they believe that there will be some sort of harvest low and then they will buy more. I've got news for them.......the harvest low was right after the March planting intentions report and USDA's 166 average yield projection.....if they didn't buy then, they missed it.
08-02-2012 01:42 PM
On the harvest low comment, I think there are a lot of folks in the roarintiger1 camp. On the Mexico purchase, I felt the same way when I saw the trader didn't give mention of it.
08-02-2012 01:49 PM - edited 08-02-2012 02:02 PM
I'm a Pioneer Hybrid guy. I'm a several generations Pioneer corn guy, Planted some other stuff once, worst corn I ever raised, We did use to plant Monsanto soybean genetics, but since my dealer stopped I went all Pioneer.
But beyond that, this court decision just shows how over bearing Monsanto has become in the seed industry.
I can just tell you what I know about the GAT gene that was in question. According to what I have learned about the GAT gene was on a different location then what the Monsanto gene was inside the plant. The idea behind the GAT gene was that the glyphosate was metabolize differently then the Monsanto version thus given the GAT genetics a yield advantage. In theory anyway.
According to the article I read is that any different what Dupont/Pioneer did then what Monsanto did with their corn rootworm stack varieties?
I guess the little bit I know about it I don't understand how the court could have sided the way it did.