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12-07-2011 07:09 AM - edited 12-07-2011 02:07 PM
At the close:
The March corn futures settled 3 cents lower at $5.82 1/4. The Jan. soybean contract finished 1 1/2 cents higher at $11.31. The March wheat futures settled 12 1/2 cents lower at $6.00 1/2. The Jan. soymeal futures finished $1.10 higher per short ton at $285.20 and January soyoil closed $0.25 higher at $50.48.
In the outside markets, the NYMEX crude oil is $0.93 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 15 points.
At mid-day, the March corn futures are trading 7 cents lower at $5.79 1/4. The Jan. soybean contract is 1 cent lower at $11.28 1/2. The March wheat futures are trading 10 cents lower at $6.03. The Jan. soymeal futures are trading $0.20 lower per short ton at $283.90 and January soyoil is trading $0.05 higher at $50.28.
In the outside markets, the NYMEX crude oil is $0.23 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 34 points.
One analyst says, today's market is littered with speculative trading.
"On the plus side, talk of dry weather in parts of Mato Grosso in Brazil supports beans. The rest of today's bearishness is just dead markets with no buying interest. Export side not big, the dollar is firm, and general fear and loathing are keeping people out of the market.
Corn and wheat are being pulled down by the news of big wheat crops in Australia and Canada, along with no demand for U.S. crops from Egypt and Iraq, he says.
"The corn cash basis in the Gulf was weak yesterday too, offering little support for the futures market."
All markets have fallen off.
At the open:
At the open, the March corn futures opened 1 1/2 cents lower at $5.95. The Jan. soybean contract opened 1/4 of a cent higher at $11.29 1/2. The March wheat futures opened 6 1/4 cents lower at $6.06 1/2. The Jan. soymeal futures opened $0.02 lower per short ton at $284.30 and January soyoil opened $0.20 higher at $50.10.
In the outside markets, the NYMEX crude oil is $0.18 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 81 points.
Hot Topic: More talk of a bubble for farmland prices in the U.S., according to the Dow Jones Newswire Wednesday. You can read it here.
MF Global will hold a hearing Thursday. Guess what? MF Global's Corzine will surface, for the first time since the company went up in flames. Take a look at this Dow Jones Newswire story.
Tom White, FutureRoad.net and CME Group floor trader in the corn pit offers up this technical analysis Wednesday morning:
"We finally did trade below the October lows, thus satisfying the minimal requirement for a 'fifth wave'. We still have to monitor for potential negative reversals over the next couple of days. However, a reversal day led to some follow-through buying in the electronic trade overnight. We also will monitor for a potential test of the mid-line area if we see continued strength. Trade above $6.08 could be a sign of upside follow through for a couple of days (but does not necessarily mean that there would be follow through today, as this is a two day indicator."
Early calls: Corn steady, soybeans up 2-4 cents and wheat down 4-6 cents.
Overnight grain, soybean markets=Trading mixed.
Crude Oil=$0.27 lower.
Wall Street=Seen trading higher on cautious optimism that progress will be made this week on the european debt crisis. Now they are talking about a "double bazooka" being formed, two funds vs. just beefing up the one rescue fund. Plus, the European Central Bank is expected to lower rates this week. And, the big summit meeting will be held in Brussels on Thursday. All eyes remain on that meeting.
World Markets=Asia/Pacific higher, and Europe's stocks trade mostly lower.
More in a minute,
12-07-2011 07:57 AM
Hey Mike had a land auction here farm was 3 miles N and one mile west of our dairy farm. 82 CSR Brought 11,900 an acre. It was an 80. I heard that MIKE M was the second highest bidder! LOL
12-07-2011 08:16 AM
Simply unbelievable. I've heard that a central Iowa farm realtor believes there is another 20% jump in land prices before a top forms. I tend to agree with the part of today's DJ story that refers to subsidy cuts putting an end to rising farmland prices. What say you?
12-07-2011 08:23 AM
Mike I have not heard any extreme land prices here. We have had below average overall crops for the last 4 to 5 years here so I think that takes the wind out of guys sails when they think of buying land. As for the markets, will we see an acreage battle this spring? With 2012 new crop price for corn with a 4 in front of it I don't call that a battle and I believe I heard the market needs 3 million more acres?
12-07-2011 08:29 AM
I'm one of those that hasn't ever used crop insurance, but takes his Direct Payment, thinks the ACRE program should be shoved up Carl Zulauf's...well never mind, and thinks we probably ought to pay back our government checks for the past 3 years. I have a lot of friends who can't figure out why the government should be guaranteeing our income..and not guaranteeing the income from their small businesses. I think these land prices are ridiculous...and can remember the 70's/80's when lots of guys were selling out because of too much optimism. Am I a pessimist? I don't think so...I'm very cautious. I won't buy land at these prices...because I'm pretty sure there's going to be land for sale eventually at a more reasonable price. Unfortunately...I believe a cut in subsidy will catch a lot of guys with their "behinds in the breeze"...
12-07-2011 08:31 AM
12-07-2011 10:21 AM
If a technical trader plotted land prices on a graph over the past three to five years, they'd definitely be buying puts or going short the market. Land prices have doubled to tripled over the past three years. We're in a parabolic move that much like any futures market will implode. The timing of the implosion is what no one knows. It's quite possible we could see an additional 20% before the top is formed. It reminds me a lot of corn price in 2008. The most concerning part is that land prices could fall to two year ago levels here locally and most of the ground bought in the last six months would be underwater nearly 50%. This happened back in the 80's. The big investors then started dumping ground when prices started to fall. They polluted the market because there wasn't enough local money to buy such large chunks of land. This caused land to fall nearly 75% over the course of five years.
What is all but comical about these situations is that banks are falling all over themselves to loan money right now on ag. land just like they were back in the late 70's and early 80's. However, when the prices started to tank very few banks wanted anything to do with ag. real estate loans. It reminds me of cows. When cows are 700-800 bucks, banks want nothing to do with them. When cows are 1500+, they fall all over themselves to finance them. Over the years, I've found the best thing to do is the exact opposite of what those in the finance industry feel need to be done.
12-07-2011 11:29 AM
Marketeye-----a $20/acre direct payment would only extrapolate to $500/acre using a 4% cap rate..
that a whopping 5% of the value of $10K land
some folks in la la land must be thinking farmers still getting CCP and LDPs on top of $6 corn!