03-30-2012 06:47 AM - edited 03-30-2012 01:44 PM
At the close:
The July corn futures settled 39 1/2 cents higher at $6.43. The July soybean contract closed 47 cents higher at $14.08 1/4. The July wheat futures settled 46 3/4 cents higher at $6.74.
In the outside markets, the NYMEX crude oil is $0.68 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 66 points.
Old-crop corn is 'limit' up, soybeans are sharply higher. One analyst says, "Old crop corn trading near limit higher reflects short covering, but more importantly the decrease in quarterly stocks is more reflective of what basis has been telling us all year, tight inventory. Look for bull spread in July/Dec corn to move well above $1.
Beans had friendly numbers all around. If November approaches $14 in the weeks ahead it probably pulls some acres from corn.
Perhaps the most surprising numbers were in wheat with a decrease in acreage and stocks. This is friendly and has created new buying and short covering."
May corn hit "limit" up today but soybean contracts have only come close.
The July corn futures trade 33 1/4 cents higher at $6.37. The Dec. corn futures are trading 9 cents higher at $5.33 per bushel. The July soybean contract is trading 54 cents higher at $14.15 1/4. The July wheat futures are trading 29 3/4 cents higher at $6.57. The July soymeal futures are trading $17.20 per short ton higher at $391.90. The July soyoil futures are trading $1.64 higher at $55.65.
In the outside markets, the NYMEX crude oil is $0.52 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 54 points.
At the open:
The July corn futures trade 23 cents higher at $6.27 1/4. The Dec. corn futures opened 7 cents higher at $5.31 1/4 per bushel. The July soybean contract is trading 50 cents higher at $14.12. The Nov. soybean futures opened 57 cents higher at $13.62 per bushel. The July wheat futures are trading 27 3/4 cents higher at $6.54 3/4. The July soymeal futures are trading $16.30 per short ton higher at $391.00. The July soyoil futures are trading $1.60 higher at $55.61.
In the outside markets, the NYMEX crude oil is $0.57 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 23 points.
Just off the phone with a floor trader. He says the market is poised for a long rally window. With tight stocks, recent sell-offs of long positions that will run this market back up, the July-Dec. corn spread trading at $1.00, the market screaming for more soybean acres pushing the corn-to-bean ratio from 2:1 to 2:4.8 and telling farmers to plant more soybeans. A trader in the background says it won't matter what the market says, the only thing that changes the farmer's mind is weather.
A good day to remind folks of the daily trade limits:
USDA announces Friday that an 'unknown' buyer purchased 120,000 mt of U.S. soybeans for 2012-13 deliery.
The over-the-counter market is not as hot for soybeans as some floor traders thought.
Corn is trading 20¢ better, soybeans 15¢ higher.
Corn=5-10 higher for new-crop, 15-20 higher for old-crop
Soybeans=30-40 cents higher
Wheat=15-20 cents higher
Corn=6.01 billion bushels, down 8%
Soybeans=1.37 billion bushels, up 10% from a year ago
Wheat=1.20 billion bushels, down 16% from a year ago
One trader says, "Bullish everywhere. Old crop corn small. Spreads will widen the inverse. Bean acreage is too small but it will help support the entire complex. Wheat bullish on stocks and small spring wheat acreage."
One analyst says, "Friendly soy acres, friendly wheat acres, bearish corn acres (expected). Stocks were neutral to friendly across the board.
Look for bullish beans to support everything else and if corn tries to trade lower on new crop you will start to hear of acres switching over to soybeans."
Another analyst says, "There is no reason to argue with the sharply higher Early Calls.
"The trade was scared to death of a bearish report and did not get it. We will be higher across the board with spreads going nuts, bull spreads in corn and bear spreads in sbs. Going to be a wild one."
Yet another analyst says, "Today’s planting indications report confirms the likelihood of a robust new corn crop with corn acres of nearly 96 million acres. This should bring welcome relief to the historic balance sheet tightness in old crop corn, but the old crop vs new crop corn spreads will likely stay wide until early season planting manifests itself as early season harvest later in the summer.
Soybeans have lost acres to corn with the good early season weather favoring corn planting, but the corn bean ratio could see beans taking some acres back between now and the next report. Soybean stocks remain somewhat tight, so farmers may have a chance to gain some margin by planting beans where they can if the corn to soybean ratio holds. "
What do you think?
Reminder: We invite you to join us this morning for the CME Group Press Briefing to be seen "live" in Marketing Talk at 8:15am. Scott Shellady will be a member of the analyst panel.
S. Korea bought 55,000 mt of South American corn Friday.
Early calls: Subject to this morning's USDA Planting Intentions and Quarterly Stocks Reports at 7:30am cst. Overnight, corn was up 2 cents, soybeans 3 cents and wheat 2 cents higher.
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.56 per barrel higher.
Wall Street=Seen trading higher on the last day of the Quarter.
World Markets=Higher with EU meeting eyed.
More in a minute,
03-30-2012 06:54 AM
This morning, I'm just curious about what number you will be watching for the most. I'm hearing the corn stocks number and how the market reacts to it will be telling. Will you be watching for corn stocks, corn acreage, soybean acreage or cotton?
03-30-2012 07:16 AM
For the most part everyone has been expecting a 94-95 million acres of corn in 2012, the stock numbers well drive the prices this summer I feel.
I'll be watching the stocks. next the acres, next how much I lost or gained by not having put options in place before the report.
03-30-2012 07:22 AM
I actually think the market has been moving on weather. Corn going in the ground is being traded as it will move new crop into the channels a month earlier. That takes a lot of pressure of old crop supplies. Beans get hurt acre wise with favorable corn planting weather. Now, that sets up a real possible fireworks. Not from a report. But a cold snap the first of May. That would make the corn market look it was on steriods---probably a small chance that happens.
03-30-2012 07:59 AM
Jec this year reminds me of 2010. We had a lot of early fieldwork and planting followed by a hard frost. The frost didn't kill the corn, but that corn crop should have been replanted in some areas. If the weather holds we will see planters rolling on April 11th. With the US seed supply already strained in 2012, replant may not be an option.
03-30-2012 08:01 AM
Just mulling this around in my head, but I wonder if the bullish wheat, and bearish corn numbers won't sor of average each other out. With lots of wheat being subbed for corn in livestock rations, a bullish wheat number could put an end to that, increasing the corn feed use.
Conversely, with corn seed in short supply, and bean seed plentiful (at least around here) some of the big operators are actually talking about planting a few early fields to beans, with the theory that if there is no frost/freeze, the early planted beans will have high yields, and if there is a freeze, and they need to replant, it will be far easier to get more bean seed. I also wonder if the cost of having to buy $40 an acre seed vs. $120 an acre seed out of pocket (if planted before the insurance date) would have something to do with it. I know a few operations have gained acres because of older farmers cutting back, or even cashing out in these days of high land prices and rent, and they are finding it difficult to get more hired help, so starting to plant early in this warmer weather can be very tempting, compared to waiting, and risking planting too late. One of them told me something to the effect that he'd rather plant a field twice, rather than too late. If I remember right, that was one of the guys who had delayed planting a couple years back, and wound up harvesting corn in the mid to upper 20% moisture range, in December.
My other thought, if the beans shoot up from the report numbers, if there won't be some last minute switching over to beans? It is still plenty early, and bean seed seems easy to get.