08-08-2012 06:44 AM - edited 08-08-2012 02:46 PM
At the close:
The Sep. corn contract settled 14 3/4 cents higher at $8.10 3/4, while the Dec. futures corn contract finished 16 cents higher at $8.16 1/2. The August soybean contract finished 24 3/4 cents higher at $16.30, Nov. soybean futures closed 15 1/2 cents higher at $15.81 1/4 per bushel. The Sept. soymeal settled $8.50 per short ton higher at $500.00, while the Dec. soyoil settled $0.28 higher at $52.39.
In the outside markets, the NYMEX crude oil is $0.28 per barrel lower, the dollar is higher and the Dow Jones Industrials are 10 points higher.
The Sep. corn contract is 5 cents higher at $8.01, while the Dec. futures corn contract is trading 6 cents higher at $8.06 1/2. The August soybean contract is trading 10 3/4 cents higher at $16.16, Nov. soybean futures are 4 cents higher at $15.69 per bushel. Aug. soymeal is trading $4.70 per short ton higher at $517.00, while Aug. soyoil is $0.06 lower at $51.23.
In the outside markets, the NYMEX crude oil is $0.33 per barrel higher, the dollar is higher and the Dow Jones Industrials are 17 points higher.
One analyst tells Agriculture.com that the markets remain choppy.
"Choppy two-sided trade early. But, you have to expect a lean to the upside on corn and bean, now through Thursday, as traders get positioned ahead of what's perceived to be a bullish USDA Crop Report Friday," he says.
Weather is turning neutral-to-negative, with no high heat the next 10 days and several rainy patterns into the 17th of August, he says.
Corn and soybeans have turned higher.
At the open:
The Sep. corn contract is 4 cents lower at $7.92, while the Dec. futures corn contract is trading 2 cents lower at $7.98. The August soybean contract is trading 3 cents higher at $16.09, Nov. soybean futures are unchanged at $15.65.
In the outside markets, the NYMEX crude oil is $0.50 per barrel higher, the dollar is higher and the Dow Jones Industrials are 7 points lower.
USDA announces Wednesday that an 'unknown' purchased 140,000 mt of U.S. soybeans for 2012-13 delivery.
News: The Russian Food Security did not announce Wednesday any grain export tariff. As a result, selling is taking place, on this morning's electronic trading.
One analyst is saying: "Yes, we have gone high enough in price to allocate the short supply, and now that weather has improved in time to salvage some soybean yield potential, the market perception might also shift from one of shortage to one of more plentiful supplies.
In fact, the USDA report Friday (which surely will cut production estimates of corn and soybeans drastically) could mark the turn in the market lower. Could we start out the day higher, and then reverse lower to form a downside reversal?"
The trade is watching Wednesday to see if Russia announces a grain export tax. This news could move the market. Plus, all eyes are focusing on whether the USDA will slightly adjust corn and soybean yields, in this Friday's Report. Or, will the government dial back the numbers to the point of early, private estimates?
What will the USDA do Friday?
Just returned from a field visit in southcentral Iowa. We tagged along with a crop adjuster. Here's what I walked away with:
--It's ugly, when you get out into these fields. I wonder if the market realizes the truth? I really wonder.
--I heard him say he has field appraisals, already, of 20, 30, and 40 bu./acre corn. A field we were in would barely do 40 bu./acre. The ears were dropping.
--Farmers will get their indemnity checks a lot faster if they are communicating with their crop adjuster now. The more you can prepare (paperwork wise) before the appraisal, the faster the process will go.
--The soybeans have pods. But, there are not many and they are not very big soybeans. BB-sized soybeans are feared for next year.
--His quote: "The soybeans are a trainwreck waiting to happen."
--On corn, farmers that are chopping are having to chop 25% more acreage than normal to get the tonnage they need.
--This is a bad year to decide whether you like a seed variety or not.
--Cornhead knives better be sharp to chop moisture-filled stalks.
--Did I say the crop situation is ugly? Let me say it again. The crop situation is ugly!
Jeff Caldwell and I visited with Dereck Klaassen, Field Supervisor with Farmers Mutual Hail Ins. Co.
Early calls: Corn 5-7 cents lower, soybeans 2-3 cents lower, and wheat 8-10 cents lower.
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.60 per barrel lower.
Wall Street=Seen opening lower, after a 3-day rally and upcoming Chinese data.
World=Asia/Pacific higher, Europe's stocks are lower.
More in a minute,
08-08-2012 07:04 AM - edited 08-08-2012 07:05 AM
This morning, if you live in Iowa, WC Illinois, Se South Dakota or NW Missouri, look up into the sky and you might see rain. Here is the latest from the Freese-Notis Weather Inc. radar:
I'm not sure what is reaching the ground, but a pretty wide-spread rain event.
08-08-2012 07:31 AM
Mike, I guess the traders do not believe the private number predictions on the crop size based on the recent market activity. They seem to be waiting for the USDA to confirm one way or the other. Do you think that they are already "All in"? Or is this thing just getting ready to explode higher?
I'm guessing that the report will still show a tight, but doable carryout number in both corn and soybeans with the numbers adjusted to make sure there is that reserve of bushels that can never go to zero.
08-08-2012 07:40 AM
You're probably on the right track. The trade is getting the poor crop story told to them. But, they will wait to see the USDA print that much lower yield estimate that private firms have been estimating, before going "all in". Friday's Report will be interesting. I imagine the government's number will need to show that they are credible but yet leave them wiggle room for adjustments along the way. On your other point. Yes, it seems these pullbacks are good opportunities for those 'fence riders' to jump on this rocket that many believe have a countdown that has started. After my field visits, oh boy! The yield monitors have quite the story to tell.
08-08-2012 08:59 AM - edited 08-08-2012 09:01 AM
On the rain thing .,.. 21 hundredths. Enough clouds and lightning for a 3 inch rain but only .21 total. = disapointment for the beans on my farm. Very streaky rain bands. Still better than a hot dry wind.
Radar estimites for here are .6 to 1 inch. It's Just not in the super duper rain guage though.
08-08-2012 09:28 AM
You DO know that crop adjusters are notorious for minimizing crop losses, don't you. Their reputation is worse than used car salesmen or television preachers.
If they had to write you a check they would have a far different perspective. PS I'm almost not kidding.
08-08-2012 09:51 AM
Logical answer is "yes" -- if average is 90,000/bu, then lighter test weight kernals would require more kernals per bu to get the weight, AND smaller kernals would require more kernals per bu.
08-08-2012 10:09 AM
Sounds like a crop disaster. I think those in power will try to paint this thing as positive as possible or just bury the story. No need to cause too much alarm.
Oil is really soaring this morning ($94.34), gas prices have risen nearly a quarter here in the last 10 days, food prices will most likely head for the moon once these high grain prices start getting passed along. Going to be a tough winter for some.
Looks like a very nice stretch of weather here in Wisconsin with highs in the 70Fs for 5 or 6 days. The European wx model shows the heat coming back big time on day 7 (next Weds) with highs for most of the midwest heading back into the 90Fs or better.