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06-26-2012 06:45 AM - edited 06-26-2012 02:22 PM
At the close:
The July corn futures settled 14 1/2 cents higher at $6.45 1/2, while the Dec. contract closed 30 cents higher at $6.24. The July soybean contract settled 13 cents lower $14.69 1/2, while the Nov. 2012 contract settled 12 1/2 cents lower at $14.13. The July wheat futures ended 4 3/4 cents higher at $7.29. July soyoil futures closed $0.42 lower at $50.85. The July soymeal futures closed $3.80 lower at $429.00.
In the outside markets, the NYMEX crude oil is $0.07 per barrel higher, the dollar is higher and the Dow Jones Industrials are 67 points higher.
UPDATED: The new weather models show rain for the eastern Corn Belt in the 1-5 day and the 15-day outlooks. We'll see if it will be enough. As a result, the markets pull back.
The July corn futures are trading 9 cents higher at $6.40, while the Dec. contract trades 17 3/4 cents higher at $6.11 3/4. The July soybean contract is trading 2 1/4 cents lower $14.80, while the Nov. 2012 contract trades 6 cents lower at $14.19 1/2. The July wheat futures are trading 2 1/4 cents lower at $7.22. July soyoil futures trade $0.11 lower at $51.16. The July soymeal futures are trading $1.70 lower at $431.10.
In the outside markets, the NYMEX crude oil is $0.11 per barrel lower, the dollar is higher and the Dow Jones Industrials are 25 points lower.
One floor trader says, "It's a bit confusing as to why the markets have pulled back Tuesday.
"I don't think the hot/dry weather outlook has changed enough to warrant a turnaround in the market. The market believes the soybean crop has a longer growing season and has time to turnaround. Plus, we have July trading at $14.75, that's not cheap. So, you're seeing some profit-taking."
Looking ahead, the weather remains the focus of the market. If we don't get rain soon, the Friday USDA Report could take a back seat to weather factors, he says. I don't see a real bullish report anyway. I don't think the government can afford corn over $7, with July in front of us. Plus, I think the market is trading a U.S. 2012 average corn yield of 147 bushels per acre. But, the USDA will not get anywhere close to that. We could be $1.00 off of our highs," he says.
One analyst sees this morning's market this way, "No, it seems to be mostly just profit-taking going on, after the big jump. There were no bullish surprises in the data for soybeans, just corn, and spring wheat condition actually improved a bit. I read somewhere that wheat is now too high to be in feed rations which could be, but I have not been able to check Southwest guys yet to see if that is true or not. Some buying showing on the break in beans, corn guys holding. Some selling in the wheat after the recent rally. Seems to be more a pause that refreshes than anything."
Soybeans have turned lower. Corn remains up double-digits, and wheat is only slightly higher.
At the open:
The July corn futures opened 18 cents higher at $6.49, while the Dec. contract trades 27 1/2 cents higher at $6.21 1/2. The July soybean contract is trading 7 1/4 cents higher $14.89, while the Nov. 2012 contract trades 5 cents higher at $14.30. The July wheat futures opened 4 3/4 cents higher at $7.29. July soyoil futures trade $0.14 higher at $51.41. The July soymeal futures opened $1.00 higher at $433.80.
In the outside markets, the NYMEX crude oil is $0.11 per barrel higher, the dollar is even and the Dow Jones Industrials are 15 points lower.
On the screen, corn is up 13 cents in the July, and up 16 cents in the Dec. contract. Soybeans are up 9. All of this exceeds any Early Calls from earlier. Watch out Nute, she's a buckin!
No fresh export sales Tuesday. I tell you what, the demand has really dropped off lately. We could be looking at another weak export sales report Thursday.
By the way, the new morning weather update shifts extreme central Plains heat east. And just some rain for the Midwest in the late June-early July timeframe. I'm sorry, I just don't see any relief coming. Open the gate, let the bulls run.
June really has been a tough month on the U.S. crops. On Monday, the USDA rated the corn and soybean crops at the 2nd lowest on record, for the 3rd week of June. Illinois, alone, had a 15% drop in its corn rating vs. a week ago!
Also, the U.S. soil moisture, 1% of normal, is now at the lowest level in recorded history, for late June timeframe. All of this, combined with weather outlooks that don't have any significant rains in them. I'm smelling a very short pause in the markets. How about you?
It looks like the floor traders are trying to save their jobs. So much so, some are suing the CME Group. Here's the full story, according to the Dow Jones Newswire. It's fairly interesting.
Early calls: Corn 1-2 cents higher, soybeans 1-2 cents lower, and wheat 10-12 cents lower.
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.13 per barrel higher.
Wall Street=Seen higher, as home and consumer confidence reports are expected to provide support. Spain's debt crisis is eyed.
World Markets=Asia/Pacific stocks are lower, Europe's stocks are higher.
More in a minute,
06-26-2012 06:50 AM - edited 06-26-2012 06:51 AM
At 6:50am, it doesn't look like there is a drop of rain out there for the crops that need it the most. Here's a glance over the Eastern Corn Belt, according to the latest radar from Freese-Notis Weather Inc:
If you panned the radar left, over the western Corn Belt, you would only see some showers in Minnesota and South Dakota.
06-26-2012 06:55 AM
The forcast here, is for 100+ the next couple days, with at best a 20% chance of rain, at the weekend. The dryland corn is starting to cook, and it seems that around here, when it goes, it goes fast.
06-26-2012 07:05 AM - edited 06-26-2012 07:40 AM
I feel for you. I think the markets have setback, overnight, due to an updated weather model showing increased rain chances for the eastern Corn Belt between June 28-July 4 timeframe.
06-26-2012 08:25 AM - edited 06-26-2012 08:34 AM
Visited with a friend of mine from East of Indianapolis yesterday afternoon. said it is as dry as he has ever seen it and the crops look less than average.
He still thinks if they get a rain by this weekend he could have 100 bu corn. He says his beans are the smallest saddest things for as long as they have been growing.
Also thinks if they do not get a rain shortly the Whole state of Indiana will see a 75 bu ave or less for the year. Only two to three counties in the state with a chance of over 125 bu yield this year.
Corn in the bottom third of Ill is toast and the choppers are going to start salvaging cattle feed shortly... not even the Fourth of July yet and they're done.
BTW he does NOT carry crop insurance because after 15 years of having it and only getting he priemium back on one farm once in 88 he decided to not carry it any more. Said the 22 years since he dropped it at about 22,000 dollars a year he will still be a little ahead as that premium money was better used elsewhere at the time and was used to build his base and aquire his get out of debt free card.
06-26-2012 08:33 AM
I don't care if you are long this market or not. I believe every word you just said your friend said. July might be a miraculously saving month. But, sitting here, on June 26, it ain't looking right.
06-26-2012 09:06 AM
06-26-2012 10:29 AM
Marketeye, for me, and most of the Nebraskans in the Western 2/3 of the State, we have irrigation on at least some of the acres. To know what it is like to irrigate, at least the way I have to do it, is to take 2 hours every morning, and every evening to do it, at a cost of $100+an acre (if it doesn't start raining soon). However, that irrigation will quite likely give me a 100 bushel yield gain, this year.
On a side note, it seems like over East, the corn is actually drying up faster than over here. Does anyone know, if that is more a result of the higher population density they plant, or do the soils there just dry up quicker? For reference, we plant irrigated corn at about 29K, and dryland about 16-19K, depending on the subsoil moisture at planting.
06-26-2012 10:48 AM
There is another side to a short crop. The economic factor. Less bushels equals less diesel, less LP/NG, less electricity, less storage revenue, less equipment needed/or needed to be upgraded, less tires used, etc. Should also mean less fertilizer needed for next year for those guys not getting a crop this year. That is all money taken out of the ag economic money rolling machine.
We talk about grains, but pastures/hay is going to be done for the rest of the summer unless it starts raining and cooling off.
Demand destruction must not have hit the pork guys, read that IA has over 50% more permits for new hog building for 2012 than last year. Those piggies got to eat something.
06-26-2012 11:03 AM
most dryland corn where I am in SE NE, 50 miles straight south of Omaha is planted around the 24-30k mark in population. Course our soils hold more water when we get it. We have caught some rain but I'm not for sure how much stress was placed on the crop earlier. Last year I waited to 1st of May to plant corn, got caught on 100 degree day, this year I planted some on April 11th Now thats starting to tassel this week. Just can't win. Since I started planted that early I spread my plantings out until I got done on May 1 so I should hit something right. The beans are way less then desirable. had to replant some.
Our hay and pasture are short this year. Short enought that I'm not for sure if I can keep all my cows since there is NO HAY for sale around home here. Small squares are selling for $10 plus in some instances, horse demand driving that up.
Even with our rain the alfalfa acts tired, its more of a cool season plant anyway and 100 degree weather isn't good for it.
I read on a post about economic conditions, I was already given a hint that next years fiscal year at coop may be slim if this crop is less then average.
I do feel for you guys back east, In 2002 I combined most of the corn, it was makiing less then 20 bushel acre. Out here we get use to that though. I know even an hour east of us in 2002 they had 200 bushel corn in places that year. We are always one missed rain away from a drought it seems like.
I had someone tell me that in NE NE it was drier then I am here.