Marketing

[marketeye]

Video: Grain Market Summary for March 21

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At the close:

The July corn futures settled 4 3/4 cents lower at $6.41 1/4. The July soybean contract finished 9 3/4 cents higher at $13.62. The July wheat futures closed 5 3/4 cents lower at $6.45 3/4. The July soymeal futures closed $4.20 per short ton higher at $370.90. The July soyoil futures ended $0.04 higher at $54.76. 
In the outside markets, the NYMEX crude oil is $1.12 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 24 points.

One analyst says, "Soybeans getting supported by some talk of new Chinese demand.  Other than that I tend to agree with you, I think specs will lighten the load a bit and that probably means selling since they are net long in soybeans and I think corn, but wheat could rally as they are short short there.  It is a slow day today.  No one doing much, not muchy from Brazil showing but they are showing some signs of selling a bit more than they have been.  Hard to get farmers on the phone, they are out digging in the dirt.  Some planting reported in so Illinois this week, but most seem to be waiting.  Delta stalled on fieldwork due to the rains, east Texas the same."

Mike

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At mid-session:

The July corn futures trade 3 3/4 cents lower at $6.42 1/4. The July soybean contract is trading 5 cents higher at $13.57 1/4. The July wheat futures are trading unchanged at $6.51 1/2. The July soymeal futures are trading $2.40 per short ton higher at $369.10. The July soyoil futures are trading $0.02 higher at $54.74. 
In the outside markets, the NYMEX crude oil is $1.09 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 32 points.

The dollar has strengthened, the drop in February home resales has weakened the stock market, and those outside factors are weighing on a commodities market that is already chopping its way to next week's USDA number.

Mike

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At the open:

The July corn futures trade1 cent lower at $6.45. The July soybean contract is trading 4 3/4 cents higher at $13.57. The July wheat futures are trading 3/4 of a cent higher at $6.52 1/2. The July soymeal futures are trading $1.90 per short ton higher at $368.60. The July soyoil futures are trading $0.12 higher at $54.84. 
In the outside markets, the NYMEX crude oil is $0.40 per barrel higher, the dollar is lower and the Dow Jones Industrials are down 12 points.

Mike

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At 9am:

PFGBest folks have released their estimates Wednesday for the March Planting Intentions Report. What do you think?:

Corn=94.500 million vs. 91.921 in 2011

Soybean= 75.900 million acres vs. 74.976 million in 2011
All Wheat= 57.500 million vs. 54.409 mill. in 2011.
Winter wheat= 41.500 million vs. 40.646 in 2011.

Mike

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At 8:45am:

AgResource Co., in a note to customers Wednesday, says the better than expected economic news in the U.S. and Europe is trumping China's weak economic news. More specifically to ag, ARC says the old-crop corn market can't fall too far, because that would spark fresh buying from China. "If China imports 5 MMTs of corn, 3 MMTs of wheat and 2
MMTs of other grains - it would equate to 10 MMTs of total grains, their biggest annual grain import total since the mid 1990's," ARC says in the daily note.

Mike

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At 6:50am:

--Japan seeks 133,792 mt of wheat from U.S., Canada and Australia Wednesday. About 57,000mt of it is U.S. wheat.

--S. Korea miller Wednesday buys 23,000 mt of U.S. wheat for May-June delivery.

--In February, China soybean imports were estimated at 3.83 mmt, up 65% on-year. Corn imports were 520,671 mt vs. 1.035 mmt in Feb. 2011.

Mike

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At 6:40am:

Early calls: Corn 3-5 cents lower, soybeans 1-2 cents higher, and wheat 3-5 cents lower.

Trackers:
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.50 per barrel higher.
Dollar=Lower.
Wall Street=Seen trading higher ahead of a U.S. housing report that is supposed to be positive for the market.

World Markets=Mixed.

More in a minute,

Mike

[Hobbyfarmer]

orning Comments; Wednesday, March 21st, 2012

SETZ - 1 hr 28 mins ago

Technical consolidation caused mixed overnight trade.

Even though the supply and demand balance sheets were just updated, trade continues to look forward to future commodity use, specifically on corn. Feed grain usage on a whole has been down this year as farmers have fed more non-traditional products, such as distiller grains. There was also more corn made into silage this year, which does not show up in grain usage formulas. Combine these factors with reduced cattle numbers and reduced feed grain demand is quite likely.

Another corn use that will likely change in the future is ethanol production. Economists believe crude oil demand will drop to its lowest level in 15 years this year. At the same time gasoline demand is expected to decline to its lowest level in 11 years. This is slowing the demand we are seeing for ethanol, even though that fuel holds a substantial discount to gasoline at the present time.

While many have enjoyed the mild winter the United States experienced this year, it may cause problems later on. Agronomists are warning that the mild conditions and lack of a significant cold spell could cause insect issues. Even in most mild winters temperatures drop to a level that greatly reduce insect populations. This could become an issue that would not only affect next year’s yields, but profitability as well.

Market Movers: Technical Indicators, Outside Markets

Early Morning Call: 1-2 lower on corn/wheat, 1-2 higher on soybeans

Karl Setzer

[highyields]

Did anyone else catch Ron Paul on Leno last night?  He was asked about gas prices, he said a president really can' t control the price of gas but can control the value of the dollar.   I wonder do all republican canidates think we need a higher valued dollar? 

Our urban counter parts would enjoy that but farmers might not. 

[marketeye]

Hobbyfarmer,

With all of this Midwest rain this week, are we looking at an early hay crop? Did the hay market drop a bit this week, with this price-bearish wet pattern. The yards and fields have greened-up sharply. My neighbor has already mowed his yard once and if the sun comes back out this week, he could be mowing for a second time this weekend. The cattle are loving the grass blades shooting out of the ground. Even if the bale ring is empty, the cattle seem to not care as much, because they have green grass to nibble on. So, back to the hay market question, do you think prices will fall? Plus, I'm hearing that with some ethanol plants slowing or shutting down, DDG feed is going to become harder to find. If you can't get DDG, does this push up corn, as cattle feeders will have to go back to the raw grain? Just some thoughts. Anybody that wants to weigh-in here, feel free. What's the situation on hay and DDG supplies in your areas?

Mike

[captive809198]

Here in southern MN, I haven't mowed my yard since the first week of August last year.  I even bought the wife a new Grasshopper and haven't even been able to use it yet!  Finally seeing some green grass which is early here too.

[Hobbyfarmer]

Me: With the exception of one load of 4x4 sq's to OK I haven't had any luck getting rid of hay this winter. took some mixed grass hay to a hay aucton and $35 a bale for 1530# bales was the going price for mine and most others that day. Lots of long faces on the sellers that morning...some had hauled it 40 miles to the sale.

I am going to seed down several fields that need a rest for row croping and am planning on renting some of the marginal grass hay fields out as pasture as I don't need any more hay sitting around and I don't want to rape the poor old hills with row crop.

Took a tour of an ethanol plant two weeks ago this Fri and they weren't slowed down according to the tour guide. They were busy starting to build a corn oil extraction plant addition to the side of the brewery building. This was at a former Hawkeye renewable facility in north Central Ia.

I had a call day before yesterday from the closest Poet plant to me just to check on me and my planting intentions. The marketer that called me said they were a little backed up at the first of the year but were moving ethanol at a better pace now and also had most of their corn needs covered for the next two months.

I asked about the corn oil thing at their plant and was told they have been removing it at that plant for some time as it was quite profitable right now.

I just run a few stock cows and only buy salt and Mineral. All feed for the cows and calves is home raised. Ear corn for extra if needed for cows and ground earcorn and the best hay for the calves at weaning to sale day. (this year it wasn't a long wait for them to get their ride to town.) The low 6 wt steers brought $5.60 short of $1100 a head.  

[GoredHusker]

I would venture to guess all candidates regardless of whether they are R, D, I, etc. want a higher valued dollar.  When the dollar value is high, the trade deficit is much smaller than when the dollar value is low.  This explains why we've broken monthly trade deficit records the past three years.  In Bill Clinton's second term as president, we enjoyed a strengthening dollar.  This also led to huge stock market returns.  Huge trade deficits have a negative impact upon the economy.  Each month we have a huge trade deficit, we lose more jobs.  According to the experts, we lose 20,000 U.S. jobs per one billion in trade deficit. 

[marketeye]

U.S. ethanol production, for the week ending 3/16/12, averaged 893,000 barrels per day (b/d) – or 37.51 million gallons daily, according to the Energy Information Agency Wednesday.  That is up just slightly (1,000 b/d) from the previous week.  The 4-week average for ethanol production stood at 897,000 b/d for an annualized rate of 13.75 billion gallons.

Stocks of ethanol hit an all-time record of 22.7 million barrels, equivalent to a 27-day supply, according to EIA Report.

Mike