04-08-2011 06:10 AM - edited 04-08-2011 03:32 PM
After the close:
See full story No sign of corn rationing
At the close:
The May corn futures settled 9 cents higher at $7.68. The May soybean contract closed 28 3/4 cents higher at $13.92 1/4. The May wheat futures settled 24 1/4 cents higher at $7.97 1/2. The May soybean meal futures settled $6.30 per short ton higher at $357.20. The July soyoil futures settled $1.45 higher at $59.77.
In the outside markets, the NYMEX crude oil is $2.32 per barrel higher, the dollar is lower and the Dow Jones Industrials are down 21 points.
Quote of the Day: "If the corn market can go higher on such a bearish report, just how bullish is this thing?
The May corn futures are 7 1/4 cents higher at $7.66 1/4. The May soybean contract is 22 1/2 cents higher at $13.86. The May wheat futures are 6 3/4 cents higher at $7.80. The May soybean meal futures are $3.40 per short ton higher at $354.30. The July soyoil futures are $1.28 higher at $59.60.
In the outside markets, the NYMEX crude oil is $1.51 per barrel higher, the dollar is lower and the Dow Jones Industrials are down 6 points.
Tenco bought 700 July futures contracts. That's 700 not $7.00. So, that buy supported this corn market.
Corn turns 4 cents higher, soybeans remain stronger at 23 cents higher and wheat stays 2 cents lower.
Yeah, you can say nobody believes the USDA's 2010-11 U.S. corn carryout number of 675 million bushels. But, also in-play is the likelihood of the U.S. Government shutting down tonight. A shutdown is market-friendly for the grain and soybean prices. And the outside markets are favorable, for the grains. So, we have some different factors working on today's trade, stay tuned!
At the open:
The May corn futures opened 5 cents lower at $7.53. The May soybean contract opened 2 1/2 cents higher at $13.66. The May wheat futures opened 1 cent lower at $7.72 1/4. The May soybean meal futures opened $0.07 per short ton higher at $352.00. The July soyoil futures opened $0.38 higher at $58.70.
In the outside markets, the NYMEX crude oil is $1.01 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 4 points.
The outside markets are favorable for the grain and soybean markets. That's why things have turned more positive than the bearish sentiment given off by the USDA Report, traders say.
Now I'm hearing 6-8 higher for soybeans, unchanged for corn.
The whisper on the floor is that corn will trade down the 'limit', based on the USDA Report numbers.
2010-11 U.S. Carryout Estimates:
Corn=675 million bushels v.s trade estimate of 595 million, unchanged from USDA's March estimate.
Soybeans=140 million bushels v.s. trade expectation of 137 million bushels, unchanged from March.
Wheat=839 million bushels vs. 861 million bushels, lower vs. March.
Early calls: Corn 10-15 cents lower, soybeans 20-25 cents lower, wheat seen 2-4 higher to 2-4 lower.
Bearish report, traders say. The Early calls could be even lower.
One corn floor trader is furious. He says, "The government either doesn't care or is incompetent." How do they come out on March 31 and say the corn stocks are 200 million bushels lower and then a few weeks later leave the same corn stocks category of the balance sheet unchanged? How? They (USDA) are playing with people's money. It's a surprise. With the overnights higher, how many guys got long and now will be burnt from this report? Some will get burnt."
Yet another corn floor trader says, "I'm shocked! That corn number of 675 million bushels is not right. It's not right. It's not even close to anyone's expectation, not even the best in the business that follow this stuff. Believe me, it will be revised. I don't believe these reports anymore. This higher corn market is not over. We'll knock 50-80 cents off the market and then it will roar back. It has too. The overall picture is still there are tight stocks."
One analyst says:
I'd say the report is comical. How do you get a grain stocks report that shows significantly less corn/soy on hand as of March 1st and then carryouts don't change.
In corn, they jockeyed 50 million from feed over to ethanol, suggesting the ethanol sector is stronger than the feed sector. Carryout unchanged.
Soybeans, no change in carryout, a few movement of numbers out of crush and exports, and then the "slush fund" which is called residual changes to offset these changes. The "slush fund" is something we like to call it. some call these bushels "in transit".
Bottom line, stocks remain tight, but this report comes in well over trade expectations in corn.
Soybeans and wheat were neutral/friendly.
I would say corn should be down in this report, if nothing else some profit taking just from the "what the hell is USDA doing" reaction.
Beans have given up all the gains already from the report last week so I don't think they drop too much more, and there is a lot of spreads that have been buying corn/selling soybeans over the last week that may profit take.
Wheat was neutral/friendly as well and that has sold off pretty hard so I can't get too negative to that with the weather forecasts for the S. Plains looking warm/dry.
Outside markets are all supportive, so if corn gets whacked 25-30-cents at the open (not that unlikely) after $1.00 plus rally I do believe end users will be waiting to buy.
Going to be interesting, that's for sure," he says.
Yet another analyst says, "Yawner. Corn and bean carryout left unchanged. Corn exports left unchanged was a surprise, after 8 weeks of surprisingly large weekly sales. Ethanol usage went up. No surprise they moved bean exports a little lower, as China is doing more south American business now. Wheat ending stocks moved lower was against pre-report trade estimates, but large ending stocks make it a non-issue. Time to take profits."
Cotton: One analyst says:
It's interesting to note, that going into today's trade, the price difference of corn and wheat (spread) is the lowest it's been in a decade. The current 10¢ spread compares to a price difference of 100 cents a month ago. Will the spread get even closer today? What do you think?
--Also, it's being reported that Aussie wheat is $80/ton cheaper than U.S. corn on the export market.
calls: Subject to this morning's USDA Supply/Demand Report to be released at 7:30am CST. Watch for the numbers right here.
Overnight grain, soybean markets=Trading higher.
Crude Oil=$1.53 higher.
Wall Street=Seen trading higher as Japan earthquake worries fade. Also, strength is coming from strong U.S. company earnings reports. Most companies are beating expectations, few are missing.
World Markets=Mostly higher.
Raining heavily in Chicago this morning. Anybody planting this weekend south of Chicago or Bloomington, IL?
More in a minute,
04-08-2011 07:50 AM
04-08-2011 08:02 AM
Mike..... To me what this report is "YELLING" at the market is...... WE CAN NOT GO ANY LOWER WITH THE CARRYOVERS...... There are a lot of people that think that even the 675 # is WAY to low and as the USDA said they are expecting more Wheat feeding along with hopefully (My words) early harvested corn from the south...... This is the only way we can be this low in the carryouts.........IMHO..... The USDA is telling the market that a major job of rationing needs to occur....... p-oed
04-08-2011 08:16 AM
May wheat is only 9 cents higher then may corn prices. I imagine some wheat is replacing corn in livestock rations. I can never remember a time when wheat and corn where on par with each other.
04-08-2011 08:20 AM
Even if I think it's nuts..I think we still trade the report today. I don't have much hope of seeing old crop beans make any nearby gains...so I dumped what I had left in DP this morning. The co-op didn't take any protection..so I'll be satisfied I probably sold them in the top 1/3 of the price range for the marketing year. On the other hand...I think Corn will trade the report today..and maybe Mon. but I think any reversal of trend is unlikely. This corn carryout number is so absurd...that everyone has to realize the USDA is trying to prevent panic. If USDA thinks we're going to get so much Sept. corn out of the south...tell me how they're going to move it north to where we use the bulk of it? The rivers run the wrong way for that to happen.......
04-08-2011 08:45 AM - edited 04-08-2011 11:12 AM
OH NO......which report do I believe? Grain under load unredeemed(hard evidence) or government stock(guess)? Doesn't matter, preception is everything.
Though, if we have a government shut down, you can't redeem sealed grain....so that might slow some sales.
Crude is the new reserve currency I would say.
04-08-2011 09:07 AM
Hey marketeye, a few days ago you asked us if we would miss the government reports if congress cuts them in order to help balance the budget. Well from today's report and with what the traders are sayen, let them get rid of it. They are nothing but a joke anyway. They can not predict or estimate if the sun is going to rise in the east and set in the west with out having to "revise" there first report. There reports are a huge waste of time for the most part. Have a good day.