09-09-2013 06:42 AM - edited 09-09-2013 12:05 PM
The Dec. corn futures contract is trading 5 cents lower at $4.63. The Nov. soybean futures contract is trading 5 cents lower at $13.62. Dec. wheat futures are trading 6 cents lower at $6.41 per bushel. The Dec. soymeal futures are trading $0.70 per short ton lower at $428.20. The Dec. soyoil futures are trading $0.37 lower at $43.35.
In the outside markets, the NYMEX crude oil is $0.98 per barrel lower, the dollar is lower and the Dow Jones Industrials are 120 points higher.
One analyst says, "I think people are just a bit worried about what USDA can say this week. Plus, there are some forecasts for some showers this week although it doesa not look like much. I think we put in a lot of price into the beans and now people are wondering what is out there, have we gone too high, high enough, of not enough? Corn seems to be in better condition and people less worried about production. Now more worried about price and US corn is high priced in the world. US Wheat, too. So those prices are soft. Southern and Delta yields for corn still pretty high, so it looks like nearby needs are getting filled now."
Yet another analyst says, "As the combines continue to move through southern fields, more corn is becoming available to buyers and basis levels are indeed reflecting that, with many Midwestern basis bids 20-40 cents lower than late last week. Futures markets are modeling that as September/December spreads continue to narrow. This will likely be the case going forward into the report as most positions are held in the November Soybeans and December Corn and few traders are likely to make a mass exodus from their positions ahead of the USDA September release on Thursday. Look for continued two-sided trade over the next few days in preparation for the coming report."
At the open:
The Dec. corn futures contract is trading 2 cents lower at $4.66. The Nov. soybean futures contract is trading 2 cents higher at $13.69. Dec. wheat futures are trading 5 cents lower at $6.43 per bushel. The Dec. soymeal futures are trading $0.10 per short ton lower at $428.80. The Dec. soyoil futures are trading $0.06 higher at $43.78.
In the outside markets, the NYMEX crude oil is $0.70 per barrel lower, the dollar is lower and the Dow Jones Industrials are 76 points higher.
--S. Korea bought 330,000 tons of feed corn in the past week. The origin is U.S. or South American.
--Ukraine's grain exports for July-Sept. 1 total 4.1 mmt, up 13% vs. a year ago. Its total 2013-14 grain exports are estimated at 23.0 mmt.
-- If you missed Informa's updated crop estimates, here you go:
Corn= 157.2 bpa (vs 158.6 bpa in Aug, and the 154.4 bpa USDA)
Soybeans= 42.4 bpa (vs 42.7 bpa in Aug & the 42.6 bpa USDA)..
Tom White, Futures.net analyst and CME Group floor trader says that technicaly the corn market has downside. In his own words, this morning:
"Corn generally traded from the short side again last week until showing slight divergence on Thursday which led to some buying on Friday. We still closed lower on the week and are far from making higher closing prices at higher values on the weeklies. Our general bias remains to the short side. But we are very open to corrective trade to the long side. We had a minor reversal pattern on Friday and the short-term charts (e.g. 60-minute) closed above the middle of its channel on Friday. There is a weekly “mean” pattern which suggests trade to 471.6-73 at some point during the week But the market will still have to convince us for a longer-term change in bias to long side as negative reversal possibilities and “wave” patterns still have us biased to the short side for now," he says.
Early calls: Corn is seen 1-2 cents lower, soybeans 7-8 cents higher, and wheat 3-5 cents lower.
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.47 per barrel lower.
Wall Street=Seen trading higher, as Japan reports a stronger-than-expected GDP.
World Markets=Asia/Pacific stocks were higher, Europe stocks lower.
More in a minute,
09-09-2013 12:48 PM
"forecast for showers this week" --- I thought concensus on here was -- too late for rain, now that crops are finishing so quickly with them turbo-charged GDD's in the last 2-3 weeks.
09-09-2013 03:23 PM
Markets are down. WTH! 95 degress, 30 mph winds and rain chances gone. Worst bean crop coming in 20 years, and the corn will be nothing great. When in the hell are traders going to wake up.
09-09-2013 03:56 PM
NW IA, it is only our backyard. Look at the crop ratings just put out. Most states are rated far above IA for corn good/ex.
But, some of these guys posting that their beans aren't going to be good, even outside of IA, must be smoking something. Today's soybean conditions is 52% good/ex verses only 32% good/ex for 2012 on this date. Given that, you would have to think Thurs. report would have a higher national average than 2012, quite a bit higher.
09-09-2013 04:16 PM
09-09-2013 04:52 PM
Wouldn't surprise me any if USDA raises the corn and soybean yield estimates in next report -- though they'd be wrong.
09-09-2013 05:05 PM
Paper trade lags as harvest approaches when negative conditions are in force. They like official numbers and may not appreciate harsh conditions if they have no background in farming. How many traders HAVE a background in farming anymore (I have no idea). I think they have a healthy suspicion of backyarditis stories, wrong or right. BUT, it doesn't really matter. They need to watch other trader's reactions on a day to day basis and respond in time for that. THAT's where the rubber hits the road for them. Leveraged money presents particular dangers to the trader. They could pull out but that isn't how they eke out the shekels.
On the other hand, when the numbers start coming in on the downside traders will react. In that sense they are not forward looking and the term 'futures' becomes a bit of a misnomer in terms of what they watch. The farmer, on the other hand, will likely benefit from increased prices as their yield goes down if the effects of heat is region wide (which should make some sense in that much of the corn and beans were planted at the same time in the upper corn belt).
09-09-2013 05:59 PM
One change the heat and dry weather may have brought is a finality to harvest.
We were looking at a long drawn out affair and I was expecting the "potential" crop to not show up until dec or Jan. Now we may know the general size and outcome much earlier.