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01-09-2012 06:37 AM - edited 01-09-2012 03:16 PM
INVITATION: Join us right here in Marketing Talk on Thursday, following the WASDE Reports, at 8:15 for a "live" streaming event from the floor of the CME Group in Chicago. A panel of market analysts will offer up their reactions to the USDA numbers right here in Marketing Talk. Be sure to grab a cup of coffee and watch what the "experts" think of this Report and of the market's direction.
At the close:
The March corn futures closed 8 1/2 cents higher at $6.52. The March soybean contract ended 36 1/2 cents higher at $12.33. The March wheat futures finished 17 cents higher at $6.41 3/4. The March soymeal futures settled $11.10 per short ton higher at $323.50. The March soyoil futures settled $1.21 higher at $52.33.
In the outside markets, the NYMEX crude oil is $0.24 per barrel lower, the dollar is lower and the Dow Jones Industrials are down 26 points.
The March corn futures are trading 13 1/2 cents higher at $6.57. The March soybean contract is trading 34 1/2 cents higher at $12.31. The March wheat futures are trading 18 1/4 cents higher at $6.43. The March soymeal futures are trading $11.20 per short ton higher at $323.60. The March soyoil futures are trading $1.05 higher at $52.17.
In the outside markets, the NYMEX crude oil is $0.87 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 7 points.
In regards to today's trade, one analyst says the crop-weather dominates. "These are weather markets for 90% of our pricing until South American crops are made. After light rains move out Wednesday it returns hot and dry into months end. Other than that pre-report trade estimates for Thursday's crop report look mildly bullish corn and friendly beans. No one wants to be short into it, for sure, but don’t expect heavy report buying either," he says.
At the open:
The March corn futures opened 9 1/4 cents higher at $6.52 1/4. The March soybean contract opened 15 cents higher at $12.11 1/2. The March wheat futures opened 13 1/4 cents higher at $6.38. The March soymeal futures opened $2.60 per short ton higher at $315.00. The March soyoil futures opened $0.76 higher at $51.87.
In the outside markets, the NYMEX crude oil is $0.64 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 33 points.
USDA says 145,000 mt of U.S. soybeans were sold to an unknown buyer Monday for 2011-12 delivery.
Tom White, FutureRoad.net analyst and CME Group corn pit trader says that technically the direction for the corn market hasn't been set.
"Last week, the market tested the daily mid-line. While markets occasionally “accelerate” through these lines and move to the upper parallel line on the channel, it is more common to initially “hang around” the mid-line for several periods. This occurred last week as shown in the dailycharts( i.e. the market is basically trading on both sides of the mid-line at 652). While the next directional bias has not definitively been established, our general view is that the impulsive nature of the move off the lows from several weeks ago would mean that any move(s) lower are corrective. We could even create a consolidation phase before establishing another move higher."
News & Notes:
--A S. Korea buyer picked up 55,000 mt of feed wheat Monday.
--Check out this Dow Jones Newswire story this morning on $1 billion of inflow, this week, into metals, grains, soft commodities due to index rebalancing. The markets could go wild if this hasn't been already priced in.
--There is market chatter that China may have bought 5-6 cargoes of U.S. soybeans last week for February-March. Also, the Argentine drought could boost the U.S. corn exports, when this situation is all said and done.
--Some say this Thursday's USDA Supply/Demand Reports will be viewed differently, based on where you are located. South America will focus more on the supply side, as it fights off a drought. Meanwhile, northern Hemisphere folks may look at the demand columns of the reports, with supply fairly well known. What do you think?
Early calls: Corn 7-9 cents higher, soybeans 9-11 cents higher, and wheat 10-12 cents higher.
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.55 per barrel lower.
Wall Street=Seen trading flat-to-higher as investors await a meeting today between German Chancellor Merkel and French President Sarkozy on new eurozone debt crisis rules for the new year.
World Markets=Mostly lower.
More in a minute,
01-09-2012 06:57 AM
Argentina, jan 9th
The drought and heat that threatens the humid pampas gave no respite during the wknd , aggravating the situation of crops for farmers and population of water shortage . Temps peaked in the 40s Celsius on Sunday in a wide crop area and similar conditions are expected Monday – tueday.
The lack of rain that affects corn and soybean crops and harms livestock has put in alert farmers and the Argentina Rural Asociation which published an extensive survey on the losses caused by the phenomenon. ARA has said that country's losses of corn and soy in some regions amount to levels of between 50 and 100 percent.
These areas are locations in the province of Buenos Aires, such as Ameghino or San Miguel del Monte, Chaco, Santa Fe and northern Chubut. In Ameghino, farmers are suffering the worst droughts of the last 104 years.
Rural institutions launched a series of meetings in various parts of the country to demand solutions to the government. They will meet on Thursday with the Agricultural Emergency Commission .Producers will be meeting today in Rio Cuarto, General Villegas in the Santa Fe , Casilda in Junín and General Pico in La Pampa.
The Federación Agraria Argentina (FAA), one of the organizers of the meetings, ask the Government strong financial support to farmers affected by the phenomenon , requesting and extension of maturities of taxes and credits and soft loans for producers.
Meanwhile, according to the survey of the SRA, Buenos Aires would be one of the provinces most affected by lack of rain. The situation is very complicated and mounting . In Saladillo,BsAs , meanwhile, losses 30/40% are common in maize crop . San Miguel del Monte the corn will not recover unless it rains 50 mm, soy is aging rapidly too.
In Corrientes, the situation is very worrying due to forest fires. The department of Gualeguay in Entre Rios the situation is serious because if it does not rain in the coming weeks losses of maize can be around 50% . Second seeded soy is very compromised as soils are completely dry.
In La Pampa, the areas hardest hit are the West and Southwest . In Rio Tercero, Córdoba, the drought is impacting hard on crops, especially maize.
Chubut, meanwhile, is in water emergency, with forest fires near Lake Puelo and water shortages in Comodoro Rivadavia, Rada Tilly and Esquel. There is also death of livestock.
Finally, in Avia Terai, Chaco, the situation becomes critical for corn and liverstock . It received half the average rainfall in 2011.
In the macro economic picture for the country , this drought will cause headaches for the government and its fiscal budget as relies on withholding taxes on grain exports of up to 35% . The issue of lowering the withholding taxes is gainning momentum in the agricultural agenda as farmers , due to their desperate situation of low yields , do not even cover the costs of their production.
picture from Venado Tuerto city taken jan8th
Forest Fires in Chubut
Brazil, Jan 9th
Rio Grande do Sul
Soil moisture is very low in several important regions of soybeans and corn. The most significant impact occurs in the southwestern region, but the greatest economic impact occurs in central and northwest .The overall picture is very delicate as we enter January with little prospect of rain for the first half of the month. Losses on corn crop are already in the 20%s and soy being stressed hard. .
Soil humidity in RGDS
Soil humidity Parana
Corn is affected seriously and soy also due to being planted earlier than in RGDS. Western and southwestern areas are the most affected .
Soil humidity Parana
Some recent rains helped and the situation improved somewhat and it is not as serious as Parana. It needs rains to keep falling due to its sandy soils but there are not many forecasts of rains for the next days.
Soil humidity MGDS
In better conditions than Parana , eventhough yield potential has already been curtailed.
Soil humidity Santa Catarina
01-09-2012 07:11 AM - edited 01-09-2012 07:12 AM
Whew! Quite the morning post there. That is a serious case of "firing" in that corn picture.
Thanks for the updated information. It appears the situation is worsening for Argentina. Plus, I just read where your government is taking away some welfare for consumers, raising utility rates, train and bus fares, and more taxes. Sounds like you all are getting hit from all sides. The government will suffer losses with this drought too.
01-09-2012 08:19 AM
Paraguay , Jan 9th
Only soybeans planted late may recover if rains come in good amnts , but it covers only 20% of the total area sown. They are in flowering stage.
Yields so far have been 2,000 kg/ha vs yield avg of 2,960 kg / Ha last year ( in the State of Alto Parana , border with Brazil ) .
In normal years , Paraguayn farmers are able to harvest 3,500 kg / Ha . Productivity in the median and early seeded varities has lost 40% in yields already.
The most affected , department of Itapua , the harvest yield on early and mid cycle , han been avgd 1,150 kg/ha . Compare that with the average productivity recorded in the department during the previous season : 2,775 kg / Ha , a drop of 59% .
Some farms reported yields as low as 800 kg/ha.
Last yr Paraguay crop was 8,372,941 tons , and was expected to harvest a similar or higher amnt this yr due to an incease of 4% of planted area.
01-09-2012 08:54 AM
There seems to be a lot of talk about Argentine corn export business shifting to the U.S. What do you hear about this idea in your circles? How much business would shift from Argentina to the U.S.? What are the estimates being kicked around right now? I know things will change down the road, because this drought is not over. But, what's the buzz agmr?
01-09-2012 09:11 AM
will try to find out ....
(remember Arg opened the gates on corn exports - abt 4mln tons a month ago- due to its high crop expectations....not sure what they ll do now ....really you NEVER know regarding Arg Gvmnt .... they change policies as often as a mom changes diapers to a baby... )
01-09-2012 10:33 AM
That is quite a load of information to digest! But the one thing to take away from all this is the fact that our grain prices here in the US are way too low. Prices must rise to put the slow down back into our exports. USDA's export estimates are way too low. The door is not nearly large enough to let everyone in who is gonna be looking to buy our grains. Our grain has been "on sale" for quite some time now and end users who were just getting comfortable again buying hand to mouth are in for a rude awakening.