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Community Manager
marketeye
Posts: 3,151
Registered: ‎05-03-2010
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Floor Talk July 11 (Report Day)

[ Edited ]

At the close:

The Sept. futures corn contract settled 7 cents higher at $5.60. New-crop Dec. corn futures closed 5 cents higher at $5.27. The Aug. soybean futures contract ended 7 cents higher at $14.72, new-crop Nov. soybeans ended 6 cents higher at $12.90.  Sept. wheat futures settled 4 cents higher at $6.83 per bushel. The Aug. soymeal futures finished $8.30 short ton higher at $458.00. The Aug. soyoil futures closed $0.49 lower at $46.53.
In the outside markets, the NYMEX crude oil is $1.74 per barrel lower, the dollar is lower and the Dow Jones Industrials are 169 points higher.

 

Mike

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USDA/WASDE REPORT SAYS:

 

 

Yield estimates:

 

Corn= 156.5 bu./acre vs. 156.5 bu./acre in June

 

Soybean= 44.5  bu./acre vs.   

 

U.S. Carryouts:

 

Old-crop corn: 729 million bushels

 

New-crop corn: `1.959 bill. bushels

 

 

Old-crop soybeans: 125 million

 

New-crop soybeans: 295 million

 

 

REPORT TRADE REACTION:

--Ken Smithmier, The Hightower Report analyst, says the new crop data was considered bearish for corn and soybeans but an uncertain weather outlook, delayed growth and thoughts that prevent plant acreage is much higher than market expectations should result in support on dips in the market.
"The old crop supply and demand situation for soybeans remains bullish. In respect to corn, until the weather clears up in the western Corn Belt and the production outlook is more defined, we would expect the December corn low of $4.90 to hold, particularly since world buyers see current price levels as attractive," Smithmier says.
Smithmier adds, "There is simply nothing bearish in the US or world wheat market, given that world production levels have topped out and the market will need to add in risk premium until more is known about the potential supply in the southern hemisphere. The Chinese will continue to buy wheat."

 

--Sal Gilbertie, Teucrium Trading, says, "The report was largely in line with trade expectations. Severe old crop tightness in both soybeans and corn will likely remain until harvest of new crop begins; this tightness will linger until late summer because it is unlikely we will see an early start to harvest due to late planting across much of the corn belt this past spring. Estimated new crop exports for corn seem low given the USDA’s price target range for corn and the current export pace to China for new crop commitments. Global wheat supplies are more than adequate, and the projected replenishment of soybean stocks in the coming crop year is much needed. If the new crop corn rebuilds stocks as anticipated, the United States will see its dominance as the world’s major exporter of major grains, led by corn, reasserted."

 

--Another analyst says, "On the corn, the USDA did what they had to do—use the acres they were given in the June acreage report and go from there.  They lowered feed use and exports by 50 million bushels each.  This was not due to tight supplies, but rather their impression of corn demand.  This lowering of corn demand could continue over the next few months, as many in the trade have lower numbers than the USDA.  A carryout of around 2.0 billion bushels is much, much larger than we are used to dealing with and is a weight on prices.  Having said that, the market looks like it has already returning to trading weather.
 
"For soybeans, the WASDE did not show any changes in demand, so the larger crop flowed through to ending stocks.  Again, it does feel more like a weather market.  
 
"Finally, for wheat, the situation becomes a little more interesting.  US demand is strong, so even a larger crop size was more than offset by strong demand.  There were also adjustments for China.  First, for both old crop and new crop, Chinese feed wheat demand was increased by 5.0 mmt. In addition, their wheat imports were also increased 5.0 mmt.  This fits with recent wheat sales to China and is also an acknowledgement by the USDA that China will be buying more and more commodities from the US and other suppliers." 

 

--Tim Hannagan, Walsh Trading senior grain analyst says that there was something for everyone, the bull and the bear. There was no large adjustment on anything for corn or beans. So two sided narrow action was seen the first half hour. Traders of large funds generally were disappointed that production was not lower on corn and beans but the usda is taking planted acres numbers from growers until july 15, leaving them time to make any measurable adjustment and leaving today with a conservative estimate. The initial reaction was lower but weather buyers were said to want to be buying a break today off the heat dome expected to move into the Midwest by Friday .the buying off the low posted gains but new crop futures may end up lower on the close.

 

--One analyst says the report is certainly bearish.
"Bean ending stocks for next year went up, that is bearish.  Corn also a little higher," he says.   
World bean numbers look negative, but not at all negative for corn and wheat, he says.
"US corn crop a little lower on acres only.  No changes in Arg or Brazil.  All in all, the report is about what I figured it would be, but I got caught looking for more drastic changes," he says.  
He adds, "I think traders were looking for USDA to cut yields because they did last year.  But they have no real reason to do it yet, they might later but not now.  So, that is causing the selling.  We now go back to a weather market, which is relatively ok."

 

Mike

---------

 

Ahead of the Report:

 

One CME Group floor trader says, "I am bearish new crop regardless of what today’s report says. I witnessed an agronomist interview where he is suggesting record corn yields in many locations… 60% of the corn that got planted on time is record plant population… 16-30 day forecast is normal to cool on temps…just in time for pollination."
 
He adds, "Old crop tightnessshould have board peaking old/ new spreads within 10-daysthen its over. You can buy meal 100 dollars a ton cheaper out of Brazil, for August Sept shipment. I doubt the Chinese take 69 million tons of bean imports this year. The last two years was 59 mill tons, with some stock building last year. Chinese corn imports will grow at lower prices. We have 7-10 million tons in balance sheet already, with a 1.9 billion carryout"

 

 

Mike

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At 9:45am:

Soybeans and wheat remain higher, about 6¢ higher, while corn is in negative territory.

 

 

Mike

-------

At the open:

The Sept. futures corn contract opened 2 cents higher at $5.56. New-crop Dec. corn futures opened 1 cent higher at $5.22. The Aug. soybean futures contract opened 1 cent higher at $14.65, new-crop Nov. soybeans opened 2 cents lower at $12.83.  Sept. wheat futures started 7 cents higher at $6.85 per bushel. The Aug. soymeal futures opened $5.20 short ton higher at $454.90. The Aug. soyoil futures opened $0.06 higher at $47.08.
In the outside markets, the NYMEX crude oil is $0.69 per barrel lower, the dollar is lower and the Dow Jones Industrials are 152 points higher.

 

Mike

-------------

At 8:20am;

Private exporters reported to the U.S. Department of Agriculture optional origin sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2013/2014 marketing year, the USDA said Thursday.

An optional origin contract provides that the origin of the commodity may be the U.S. or one or more other exporting countries.

The 2013/2014 marketing year for soybeans will begin Sept. 1.

 

Also, USDA announces Thursday that China bought 120,000 tons of U.S.  corn for 2013-14 delivery.

 

Mike

--------

At 8am:

Jeff Coleman, the Trean Group analyst and CME Group floor trader, sizes up the farm markets this morning.

 

He says, "The trade from yesterday and last night’s overnight session was affected by three factors. Tight supplies, current weather conditions and today’s 11:00 AM CST release of the USDA/WASDE reports concerning production and supply and demand. The big three grain markets are all around the unchanged level but traded in decent ranges overnight. December corn futures traded in a 9.25 cent trading range on heavy volume closing out the overnight session nearly unchanged as we are seeing traders shoring up positions before the report. November soybean futures traded on moderate volume in a 11.75 cent trading range and are slightly lower this morning. December wheat futures are 4.5 cents higher as we head into the close."

 

Mike

-----------

At 7:30am:

USDA Weekly Export Sales Thursday:

 

Corn=1.049 million tons.

 

Soybeans= 320,900 tons

 

Wheat=  1.473 million tons.

 

Meanwhile, one analyst says this market rally is short-lived and that this morning's USDA Report will prove it. In his own words:

 

"Instead, this is likely a move higher in corrective mode from the recent washout in grains to new lows.  
That means it's likely the downtrend will continue, with a move to new lows likely in the near term as crops continue to improve in the field. It's likely USDA will also issue a negative report Thursday, and it may not be in the best interest of traders to ignore that negative report," he says.

 

What say you about today's USDA/WASDE Reports?

 

Mike

-----------

At 7:10am;

--Taiwan buys 60,000 tons of Brazilian corn Thursday.

--Japan buys 49,954 tons of U.S., Aussie, Canada wheat.

--China's wheat imports are expected to hit a 9-year high, this year.

 

Mike

----------

At 6:05am:

 

Early calls:  Corn is seen 5-7 cents higher (old-crop), soybeans 10-11 cents higher (old-crop), and wheat 3-5 cents higher. Meanwhile, new-crop corn 4-6 cents higher and soybeans are seen 7-9 cents higher.

 

Trackers:
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.70 per barrel lower
Dollar=Lower.
Wall Street=Seen higher, after Fed meeting minutes showed that Chairman Ben Bernanke soothed on tapering. Bernanke says that any sharp rise in interest rates wouldn't happen while unemployment rates remain at 6.5%.

World=Asia/Pacific stocks were higher and Europe's stocks are higher.

 

 

 

More in a minute,

 

Mike

Community Manager
marketeye
Posts: 3,151
Registered: ‎05-03-2010
0

Re: Floor Talk July 11 (Report Day)

[ Edited ]

Dan Looker, Successful Farming and Agriculture.com's Business Editor covered the congressional hearing on the Smithfield buyout by a Chinese company. Some of the back-and-forth between Smithfield's CEO and lawmakers is interesting. What's your perspective on this proposed buyout?

 

Here's the full story:

 

Goodbye U.S. bacon?

 

 

Thanks,

 

Mike

Senior Contributor
Buckley_HF
Posts: 165
Registered: ‎12-29-2011
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Re: Floor Talk July 11 (Report Day)

Good morning mike. Need a name for the trader who said those comments so we know who to not listen to in the future. If he wants to take USDA as gospel good for him. But my guess is USDA fantasy land numbers will be traded for a few seconds by the algos then we turn straight back to weather. If he wants to short a heat dome in July during pollination good for him. And good luck!
Community Manager
marketeye
Posts: 3,151
Registered: ‎05-03-2010
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Re: Floor Talk July 11 (Report Day)

Buckley_HF,

 

Ray Grabanski would be your answer. Also, what is it  that you will be watching for in this morning's report. For instance, the trade is apparently curious about the USDA/WASDE updating its 2013 yield estimates. Right now, the average corn yield is pegged at 156.5 bushels per acre, almost 5% below trendline. Where do you think the USDA will peg that number this morning? 

 

Thanks,

 

Mike

Veteran Contributor
aaron-neill
Posts: 67
Registered: ‎05-17-2010
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Re: Floor Talk July 11 (Report Day)

So the trend is down and the up move was short covering...we knew that.  What happens when ratings dont improve or go down next week?  Very likely.  I really want to see what happens to these markets next year when we only plant 87million acres because NC is $5 with high inputs.  The folks that think we don't need a surplus will be surprised.

@cfarms76
Senior Contributor
tree fmr
Posts: 379
Registered: ‎06-04-2010
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Re: Floor Talk July 11 (Report Day)

I think a lot of people will be disappointed and not believe it! Not gonna be as bullish as some would like.
World stocks are gonna go up. Just my humble opinion.
Senior Contributor
tree fmr
Posts: 379
Registered: ‎06-04-2010
0

Re: Floor Talk July 11 (Report Day)

Lets have china write and approve the farm bill. At least then something will get done!
Veteran Advisor
roarintiger1
Posts: 1,584
Registered: ‎04-29-2011
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Re: Floor Talk July 11 (Report Day)

Are you sure they (The Chinese) aren't already writing it?

"Failing to prepare is preparing to fail." "Success happens when preparation meets opportunity"
Advisor
Red Steele
Posts: 4,488
Registered: ‎05-13-2010
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Re: Floor Talk July 11 (Report Day)

Any politician that takes campaign funding from a foreign government should be disqualified and prosecuted for treason. Romans executed their politicians that were convicted of taking bribes, and their republic lasted for a long time.

"Peace on earth would mean the end of civilization as we know it" Joseph Heller
Senior Contributor
k-289
Posts: 1,764
Registered: ‎05-13-2010
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Re: Floor Talk July 11 (Report Day)

One interesting statement from Mr. Pope being he wasn't sure the compensation package would net him --- interesting he wasn't sure of the amount ?