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Community Manager
marketeye
Posts: 3,154
Registered: ‎05-03-2010
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Floor Talk November 9 (Report Day)

[ Edited ]

At the close:

The Dec. futures corn contract finished 2 1/2 cents lower at $7.38. Jan. soybean futures contract settled 44 cents lower at $14.51. Dec. wheat futures ended 16 cents lower at $8.86 per bushel. The Dec. soyoil futures contract closed $1.00 lower at $47.77. The Dec. soymeal futures contract finished $13.20 per short ton lower at $449.70.


In the outside markets, the NYMEX crude oil is $1.19 per barrel higher, the dollar is higher and the Dow Jones Industrials are 9 points higher.

 

Mike

---------

At the open:

The Dec. futures corn contract is trading 3 cents higher at $7.44. Jan. soybean futures contract is trading 29 cents lower at $14.67. March wheat futures are trading 7 cents lower at $9.09 per bushel. The Jan. soyoil futures contract is trading $0.67 lower at $48.10. The Jan. soymeal futures contract is trading $7.10 per short ton lower at $455.80.


In the outside markets, the NYMEX crude oil is $0.12 per barrel lower, the dollar is higher and the Dow Jones Industrials are 5 points higher.

 

Mike

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

At 7:30am:

USDA SAYS:

 

Production

Corn=10.725 bill. bu.

 

Soybeans=2.971 bill. bu.

 

 

Harvested Acreage

Left alone

 

Yield

Corn=122.3

 

Soybeans=39.3

 

Corn has dropped 4 cents, beause of the report. Soybeans have fallen 20 cents and wheat is down too.

 

ENDING STOCKS

Corn=647 million bushels

Soybeans=140 million bushels

Wheat=704 million bushels

 

TRADE REACTION:

--One floor trader tells me, "No real surprises. Bean yield raised 1.5 bu./acre.  I think that was already in the market. Volatility in all pits is getting smoked. The trade is very complacent for the balance of the year. I think we will get a move before the end of the year."

 

--One analyst says, "Entering the report the trade was carrying a negative bias from yesterday's bearish weekly export sales report showing a slow down in bean and corn exports.
"It's not how the market opens but how it closes on report day that suggests the near term trend. There was unwinding of short corn/long bean spreads after the initial sell off on the opening, pulling corn back up. All grains look to resume a bearish demand bias after the report reaction is over," he says.

 

--One CME Group floor trader, requesting anonymity, says the only surprise is the soybean yield increasing 2.5 bushels from Oct to Nov.
"I assume this is one of the largest changes we have had, the market had been anticipating larger numbers. But, I figure 39 yield was the over and under," the floor trader says.
The USDA gets back on the export pace and still can accommodate a 140 million carryout, he says. "This keeps a lid on prices as long as Brazil weather remains fair. We are fairly bullish corn. Expect export pace to pick up with feed grains rallying to new highs this week in EU and wheat and corn now looking competitive. So, expect those markets to be well supported," the floor trader says.
A rallying dollar and week equity markets keeps fund participation light.
"Overall, the bean market will be driven by South American weather from here," the floor trader says.


-- Sal Gilbertie, Teucrium Trading says that today's report confirms tight balance sheets for both corn and soybeans. The rise in soybean yields was largely offset by increased demand predictions by the USDA, which means prices may not be rationing demand as much as needed. Traders are clearly looking to South America for a good soybean crop this season, which should offset the severly tight balance sheet caused by the US drought. But this season's South American crop will be vitally important to keep the soybean balance sheet from tightening further. All eyes are on South America now as well as on the prospects for good yields next year for corn in the US but those seeds are not even in the ground yet.
Demand remains steady across all the grains.

 

---One analyst says, "World soybean stocks figure bearish, mostly due to the big increase in US production. Record large Chinese imports with a jump of another 2 MMT this morning. Corn numbers neutral.

 

---One analyst says, "Overall, the report surprised to the bear side.
"Overall, good report by USDA, taking the right steps," he says.
The USDA's corn yield was increased by 0.3 bushel vs. their previous estimate of 122.0 bushels per acre. There was no change in usage, with carryout increased to 647 million bushels. "Those numbers are snoozers," he says.
For soybeans, the USDA released its bearish data. "Wow, a huge yield increase of 1.5 bushels per acre, equaling 113 million bushels more production," he says.
Soybean exports were cranked up 80 million bushels and crush up 20 million, to offset most of the production increase, giving you a 10 million bushel increase in carryout, he says.
"This report surprised us to the bear side on the soybeans, but not on carryout. Our estimate was up 15 million bushels," he says.
For wheat, it's real simple, USDA lowered exports 50 million bushels. I totally agree. "Those exports have been lowered more than expected and needed to be lowered,"

 

Mike

-----------

 

 

At 7am:

--Because Brazilian ports are congested, Japan opted to buy 500,000 mt of U.S. feed-grade corn Friday, according to the Dow Jones Newswire.

--Japan seeks 320,000 mt of feed-wheat, barley.

 

 

Mike

---------

At 6:45am:

Early calls:  Subject to the USDA Crop Production and Supply/Demand WASDE Reports to be released at 7:30am CT. Look for the numbers and trade reaction immediately following the report right here.

 

 

Trackers:
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.36 per barrel lower.
Dollar=Higher.
Wall Street=Seen opening mixed, with Obama comments about the fiscal cliff being eyed and questions about Greece's ability to secure aid.

World=Asia/Pacific stocks are mixed, while Europe's stocks are lower.

 


More in a minute,

 

 

Mike

Advisor
giolucas
Posts: 1,108
Registered: ‎06-25-2010
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Re: Floor Talk November 9 (Report Day)

Lit 20 Candles already, said my prayers and fed the goldfish!!!!  I'm Ready!!

Community Manager
marketeye
Posts: 3,154
Registered: ‎05-03-2010
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Re: Floor Talk November 9 (Report Day)

giolucas,

 

Are you entering this report 'long' corn, short soybeans? Or, are you simply on the sidelines?

 

Mike

Advisor
giolucas
Posts: 1,108
Registered: ‎06-25-2010
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Re: Floor Talk November 9 (Report Day)

I just got out of half of my corn.  LONG CORN,   doing no soybeans.

 

Senior Contributor
highyields
Posts: 790
Registered: ‎06-04-2010
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Re: Floor Talk November 9 (Report Day)

The bean number is still surprising me.  Evidently SOMEBODY got rain somewhere.    

Advisor
hardnox604008
Posts: 5,518
Registered: ‎05-14-2010
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Re: Floor Talk November 9 (Report Day)

A lot of good beans, some VERY good in the ECB.

 

Rain flipped mid-summer- the driest areas had been in the east and got rain, the western areas dried out further.

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason."

J.K. Galbraith
Advisor
hardnox604008
Posts: 5,518
Registered: ‎05-14-2010
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Re: Floor Talk November 9 (Report Day)

as the plains irrigators have learned, nothing beans like better than struggling through vegeative stages then  hot and wet through reproduction.

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason."

J.K. Galbraith
Senior Contributor
Blacksandfarmer
Posts: 893
Registered: ‎08-04-2010
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Re: Floor Talk November 9 (Report Day)

Looks like I was right on the money with my mid summer yield guess.

Community Manager
marketeye
Posts: 3,154
Registered: ‎05-03-2010
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Re: Floor Talk November 9 (Report Day)

One analyst says that even though the USDA left harvested acreage alone in this report, it is expected to fall in the January report. For corn, the analyst sees corn harvested acreage falling 1.5-2.0 million acres and soybeans dropping 800.000-1.0 million.

 

And as far as marketing your crop, selling into this setback would not be advisable. Buyers should pick up corn and soymeal needs here. But, farmers are advised to wait until $7.50 price returns for corn and $15.50 returns for soybeans, before selling.

 

He sees the basis appreciation for another 30-40 days, and then a flood of tax selling of crops.

 

Mike

Senior Contributor
highyields
Posts: 790
Registered: ‎06-04-2010
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Re: Floor Talk November 9 (Report Day)

It doesn't make senes for USDA to keep raising bean production if they are worried about tight supplies.  Bigger supplies less for price.  prices falling going to lead to more demand.  

 

and the idea of record production out of south america is slipping away, for a record crop you have to have good planting conditions, farming has to be the same as it is here, planting in the mud is no good, especially if the rains stop.