07-18-2014 06:50 AM - edited 07-18-2014 02:14 PM
At the close:
The Dec. corn futures closed 8 3/4 cents lower at $3.78.
Nov. soybean futures finished 8 3/4 cents lower at $10.85.
Sep. wheat futures ended 18 1/2 cents lower at $5.32.
The Dec. soymeal futures contract closed $5.70 per short ton lower at $351.80.
In the outside markets, the NYMEX Brent crude oil is $0.08 per barrel lower, the dollar is lower and the Dow Jones Industrials are 124 points higher.
The Dec. corn futures are trading 3 3/4 cents lower at $3.83.
Nov. soybean futures are trading 4 1/4 cents higher at $10.98.
Sep. wheat futures are 15 1/2 cents lower at $5.35.
The Dec. soymeal futures contract is trading $1.60 per short ton lower at $355.90.
In the outside markets, the NYMEX Brent crude oil is $0.24 per barrel lower, the dollar is higher and the Dow Jones Industrials are 108 points higher.
Jack Scoville, PRICE Futures Group vice-president, says the market did not respond too well to the Ukraine disaster yesterday and to all of the soybeans export sales over the last few days.
"So, it is hardly a pillar of strength. It looks to me like anyone who bought futures over the last few days is exiting stage left. Plus, probably some new selling just on the poor performance right now," Scoville says.
The crop-weather is great and going to warm up next week, which is needed, Scoville says. Some showers will be around later next week to help maintain good condition.
"So, no one wants to be caught long this thing these days. It is weaker than I anticipated today, but it seems that cooler heads are prevailing in Ukraine, so no move to halt sales and shipments from the Black Sea and no other real reason to own anything here. It might get kind of ugly here today, wheat already is," Scoville says.
Alan Brugler, Brugler Marketing & Management LLC, says that the short-covering that provided the corn market with an initial bounce yesterday has faded.
In general, "The trade has been consolidating over the last 5 days as the market attempts to work off of oversold levels. Trader talk is that China sold 473,000 MT of the 502,000 MT of corn it offered at auction from state reserves this week," Brugler says.
USDA weekly export sales were stronger than expected a 1,068,000 MT. Commitments as a percentage of total exports are still a little light at 100%, which compares to 104% last year and the 5-year average of 103% Brugler says.
For soybeans, funds were estimated to be net sellers of roughly 5,000 contracts of soybeans yesterday, Brugler says. "Trader talk is that there was heavy producer selling in Brazil, yesterday, during the early morning rally."
USDA reported net weekly export sales for US soybeans last week were 598,700 MT. Taiwan and China both bought old crop beans. In other export news, private exporters reported to the U.S. Department of Agriculture export sales of another 708,000 metric tons of soybeans to China during the 2014/2015 marketing year.
"Despite the large purchase announced yesterday, contracts for delivery to China in the new crop year are still behind year ago by at least 80 million bushels," Brugler says.
Helen Pound, KCG Futures senior grain analyst, says the market still eyes the airplane tragedy turmoil between Ukraine/Russian.
"The key question is whether or not the grain trade will view this tragedy as an impediment to international trade. If this event spurs reconciliation, then expect prices to erode. If this event inflames the turmoil, it may become more difficult for Ukrainian farmers to harvest and market their wheat and corn crops and prices may improve.
What does everyone else think about the huge soybean sales recorded in the last few days, yet the market not acting very impressed?
In early trading:
The Dec. corn futures are trading 2 3/4 cents lower at $3.84.
Nov. soybean futures are trading 2 1/4 cents lower at $10.91.
Sep. wheat futures are 7 1/4 cents lower at $5.43.
The Dec. soymeal futures contract is trading $0.01 per short ton lower at $357.40.
In the outside markets, the NYMEX Brent crude oil is $0.51 per barrel lower, the dollar is higher and the Dow Jones Industrials are 43 points higher.
Early calls: Corn is seen 1-2 cents lower, soybeans 2-4 cents higher, and wheat 2-4 cents lower.
Overnight grain, soybean markets=Trading mostly lower.
Brent Crude Oil=$0.37 per barrel higher.
Wall Street=Seen flat.
World Markets=Europe stocks were lower, Asia/Pacific stocks were lower.
More in a minute,
07-18-2014 09:55 AM
Hello Mike and boys,
Reuters reported yesterday that Monsanto and soybean buyers in Brazil fight over royalties payments. Currently, Monsanto tries to make commodity trading firms to ensure farmers pay the proper fees for its new South American seed, Intacta RR 2 Pro. In Brazil, soybean traders are represented by Vegetable Oils Association (Abiove), which told Reuters that it can't ssume legal responsibility for the collection of royalties.
Now, the current concern is about the next year crop. If the battle continues, this trading companies perhaps will not be able to buy soybeans from farmers who planted with Mosanto's Intacta RR2 in Brazil. The seed has about 25 percent of the Brazilian market and a lot of farmers already purchase their seeds for the next seeds. Intacta RR2 is believed to be resistant to caterpillar Helicoverpa armigera, which devastated crops in recent years.
I don't have a guess about a final decision, but I believe this would last really long. The Brazilian judicial system allows a huge number of appeals. So can we guess a strong market rebound for soybeans next year if this melee continues?
07-18-2014 02:08 PM
I am not sure it will have much effect Louis. Monsanto will buy the law if it has too. I am hoping this corn price reduction will keep the seed pimps off the combines this fall. But reality will probably keep them telling the farmer how to farm.
07-18-2014 03:28 PM
MARKET COMMENTARY July 18, 2014
Corn in the red all day long.A new low close of the year as first time we closed sub 3.80 on December corn, on the better weather forecasts.