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Floor Talk February 9 (Report Day)

[ Edited ]

At the close:

At the close, the March corn futures closed 1 1/4¢ lower at $3.69 1/2, and new crop December 2017 futures finished 1 3/4¢ lower at $3.95 3/4 per bushel. March soybean futures closed 8 1/4¢ lower at $10.50 1/2, while November 2017 soybean futures ended 2 1/4¢ lower at $10.26. March wheat futures ended 11¢ higher at $4.43 1/2. March soy meal futures finished  $2.80 short ton lower at $338.40. March soy oil futures closed $0.02 lower at 34.67¢ per pound.  In the outside markets, the Brent crude oil market is $0.59 per barrel higher, the U.S. dollar is unchanged, and the Dow Jones Industrials are 135 points higher.

 

Mike

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At 1:15pm:

 

If you missed it this morning, there was also a fresh export announcement, aside from the weekly and the WASDE Reports.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 107,000 metric tons of soybeans for delivery to unknown destinations during the 2016/2017 marketing year.

The marketing year for soybeans began Sept. 1.

 

Mike

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At 1pm:

Wheat is up, corn and soybeans fall.

 

DeAnna Hawthorne-Lahre, StatFutures co-founder and trader, says that it ooks like a bit of a surprise."Usually the Feb report is a snoozer, but the USDA is starting to dig into wheat and corn ending stocks - wheat  most likely from the India crop, which I have been watching closely, and corn from China's recent actions. Soybean stocks are higher for the trifecta, which makes for a lower trading day for the funds. All we talk about is the Dollar and the corn and soybean acreage numbers that will be announced in March, which will not change."

 

Mike

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At mid-session:

At mid-session, the March corn futures are 1/4¢ higher at $3.71, and new crop December 2017 futures are 1/2¢ lower at $3.97 per bushel. March soybean futures are 6 1/4¢ lower at $10.52, while November 2017 soybean futures are 4 1/4¢ lower at $10.24. March wheat futures are 6 1/2¢ higher at $4.39. March soy meal futures are $1.90 short ton lower at $339.30. March soy oil futures are $0.03 higher at 34.72¢ per pound.  In the outside markets, the Brent crude oil market is $0.75 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 124 points higher.

 

Mike

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At 11:06am:

The market is not reacting strongly, according to Scott Shellady, TJM Investments. "No real shockers. Market was leaning for a good number....looks like we will go back to trading the technicals."

 

Mike

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At 11am:

USDA SAYS:

 

U.S. ENDING STOCKS

In its February USDA/WASDE Supply/Demand Reports, the government pegged the U.S. 2016-17 corn ending stocks at 2.32 billion bushels, vs. the trade’s expectations of 2.335 billion bushels and the USDA’s January estimate of 2.355 billion.
For soybeans, the 2016-17 U.S. ending stocks are estimated at 420 million bushels, compared with the trade’s expectations of 410 million and the USDA’s January estimate of 420 million bushels.
The U.S. 2016-17 wheat ending stocks have been pegged at 1.139 billion bushels, vs. the trade’s expectations of 1.18 billion bushels and the USDA’s January estimate of 1.186 billion.

WORLD PRODUCTION
The USDA sees the 2016-17 Brazil corn production at 86.5 million metric tons, compared with the average trade estimate of 87.05 million metric tons and the USDA’s January estimate of 86.50 mmt.
Brazil’s soybean production is pegged at 104 million mt. vs. the trade’s expectations of 104.08 mmt and the USDA’s January estimate of 104.00 mmt.
For Argentina, the USDA sees its corn production totaling 36.5 million mt. vs. the average trade estimate of 35.78 mmt. and the USDA’s January estimate of 36.50 mmt.
Argentina’s 2016-17 soybean production is pegged at 55.5 million mt. vs. the trade’s expectations of 54.54 mmt and the USDA’s January estimate of 57.00 mmt.

 

TRADE RESPONSE

 

--Sal Gilbertie, Teucrium Trading, says that the USDA statement saying that total global supplies of wheat are falling and total global use of wheat is increasing pretty much sums up the big news in today’s report. "Global wheat stocks, while adequate, fell by 4.7 tons, or about 172 million bushels last month, primarily due to problems with India’s wheat crop. Corn use, production and trade are all raised this month with monthly demand for corn exceeding over one billion tons globally. Soybean production is lowered on a global basis with Argentina’s wet weather taking center stage. Unrelenting global demand for all grains will keep markets alert for any supply issues moving forward."

 

--Jason Roose, U.S. Commodities grain analyst, says that Thursday's USDA/WASDE report offered no real surprises.

"The soybeans are taking premium out of the market, post report, due to the unchanged ending stocks from January, the USDA left South America bean production unchanged which is negative. Endings stocks on corn were lowered, slightly due to better feed and ethanol demand, perhaps giving corn support on breaks."

 

--Jack Scoville, The PRICE Futures Group's Senior Market Analyst, says that on the face of it bearish beans as no big changes made for South America. 

"The drop in Argentina's soybean production not enough for this crowd.  No changes at all for the US.  Corn US and world headline numbers kind of bullish, but corn down with beans.  Wheat looks bullish.  Corn and wheat got the demand, beans will be losing demand," Shellady says.

 

--The market is not reacting strongly, according to Scott Shellady, TJM Investments. "No real shockers. Market was leaning for a good number....looks like we will go back to trading the technicals."

 

Mike

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At 10am:

If you missed the USDA Weekly Export Sales Report Thursday, here are the numbers:

 

Wheat= 543,600 metric tons vs. the trade’s expectations of 300,000-500,000 metric tons

Corn= 1.06 million mt vs. the trade’s expectations of 800,000-1,100,000 metric tons,

Soybeans= 536,300 mt. vs. the trade’s expectations of 500,000-800,000 metric tons

Soybean meal= 348,000 mt. vs. the trade’s expectations of 100,000-300,000 metric tons.

 

Mike

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At the open:

At the open, the March corn futures are 1 1/2¢ lower at $3.69, and new crop December 2017 futures are 1 1/2¢ lower at $3.96 per bushel. March soybean futures are 2 1/2¢ lower at $10.56, while November 2017 soybean futures are 3 1/4¢ lower at $10.25. March wheat futures are 1/4¢ lower at $4.32. March soy meal futures are $1.40 short ton lower at $339.80. March soy oil futures are $0.17 higher at 34.86¢ per pound.  In the outside markets, the Brent crude oil market is $0.78 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 37 points higher.

 

Mike

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Soybeans and corn were lower despite projections that the USDA will lower its carryout projections for both crops. Beans lost about 5 cents while corn was down just over a penny. Forecasts for Brazilian projection will likely edge higher in today's WASDE while the outlook for output in Argentina for both crops is expected to be lowered. In weather news, the East Coast is getting blasted by a large storm this morning while the Midwest clears and bitter cold moves in. 


Here's what happened overnight:

 

Brent Crude Oil = 0.7% higher.

West Texas Intermediate Crude Oil = 0.7% higher.

Dollar = up 0.1%.

Wall Street = U.S. stock futures slightly higher in pre-market trading.

World Markets = Global stocks higher, following crude futures.