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08-12-2010 08:01 AM - edited 08-12-2010 04:21 PM
Thursday's weekly export wheat sales were the highest in 34 months. This morning, USDA estimated a wheat crop, that if realized, would be the largest since 2000. And I'm sure you have already heard that Thursday's USDA corn and soybean crop & yield estimates would be record-large. Actually, the soybean yield would be the same as last year's record yield. I'm hearing that depite the Delta's crop problems, the rest of the soybean-producing states will make up for those losses to reach a record.
At the close:
After reaching as high as $4.29 1/4, the Dec. corn futures settled 10 3/4 cents higher at $4.21 3/4 per bushel. The Nov. soybean futures contract closed 13 cents higher at $10.28 1/2 per bushel, reaching an intra-day high of $10.37 1/4. The Sep. wheat contract closed 18 1/4 cents higher at $7.13 per bushel, with a session high of $7.32. The Dec. soymeal futures closed $8.30 per short ton higher at $296.20, the Dec. soyoil finished 55 points lower at $41.83.
One trader says Thursday’s rally indicates people are scared about grain supplies.
“For the first time, even following the increase the USDA tacked onto average yields, people don’t believe the numbers,”he says. “They don’t believe we have the old-crop numbers and they are starting to figure out we won’t have the U.S. new-crop corn acreage.”
He says with winter wheat plantings taking place right now in Nebraska, Kansas, Oklahoma and Texas, the U.S. is poised to lose massive amounts of corn acres for 2011. In addition, with cotton plantings increasing, corn acreage will be lost in the South.
To end the week, the market will be strong, he says. “We are getting massive amounts of fund-money flowing into our markets. Purchases of five and ten thousand call contracts took place Thursday. These funds may be late. But, this could signal the next leg up on the rally across the floor.”
This thing is really running now!! The floor is hopping. The screams are coming from every direction. Corn is now 17 cents higher, soybeans 20 cents higher and wheat 27 cents higher. Demand and lower world wheat supplies are pushing this market through the roof! There's a new report, clearing the wires that Brazil's soybean crop will be lower in 2010-11 vs. 2009-10.
At mid-session, the Dec corn futures are 11 1/2 cents higher at $4.22 1/4. The Nov. soybean contract is 13 cents higher at $10.28 1/2. The Sep. wheat futures are 30 1/4 cents higher at $7.25. The Dec. soymeal futures contract opened $5.60 per short ton higher at $293.50, Dec. soyoil down 26 points at $42.12.
In the outside markets, the NYMEX crude oil is $1.26 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 42 points.
At a CME press briefing, this morning, analyst said to expect uncertainty in these markets. "The Russian drought has changed the landscape of agriculture for the next 18 months at least," said Dan Basse, president of AgResource Company, an agricultural research firm. "There will be plenty of volatility in the months to come."
Markets Rally! Corn is up 11 1/4 cents, soybeans are 12 cents higher, and wheat is up 27 1/4 cents.
One floor trader says, "Everybody tried to sell the USDA report, out of the box, thinking it was bearish beans for sure, a little bit negative for wheat, and for corn, people think it's a neutral number. With the USDA putting the yield at 165 bu./acre, that might end up being the biggest number the USDA puts out. So, traders tried to press this USDA report and found it's not working. We have turned right around and everything has made new session highs. This rally is not being led by funds, because they normally participate on the open and the close. They weren't there on the open. But, watch out for the close, the funds might be there.
Soybeans have already turned lower.
At the open:
At the open, the Dec corn futures are 6 cents higher at $4.17. The Nov. soybean contract is 5 cents higher at $10.21 1/2. The Sep. wheat futures are 22 3/4 cents higher at $7.19 1/2. The Dec. soymeal futures contract opened $2.10 per short ton higher at $290.00, Dec. soyoil down 13 points at $42.25.
In the outside markets, the NYMEX crude oil is $1.55 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 57 points.
One analyst says, "I think the fact that you produced record crops of both corn/soy and saw carryouts decline is a little nerving, considering the fact that the corn crop has taken a turn for the worse since the data was collected on August 1st. more flooding in IA and some extreme heat across some of the key growing states.
We are getting early agronomy analysis on corn in MN estimating the crop less than last year which is a shocker to us as we have been the highest rated crop in the nation all year. The reports are saying cool/wet stress in June and then a big surge in Growing Degree Units pushing the corn to maturity too fast leaving kernel depth shallower than a year ago.
Usage is very strong and with the currency situation where it is that should continue. The bean sales to China are very strong and you have the Japanese Yen at 15 year highs so a new player should be emerging out of Japan."
USDA says: 110,000 mt of U.S. soybeans sold to Egypt for 2010-11 delivery. Alos, 116,000 mt of U.S. corn sold to 'unknown' for 10/11 delivery. And 275,000 HRS U.S. wheat sold to Canada for 10/11.
Trader's report response: "Yields are high enough that you are getting a mixed response… our camp is buying any set back today… ignoring the report…and the outside markets and worried about hot and dry weather in southern belt… too wet in Iowa..… We think August 1 survey is highest yields of the year… that once ear weight and kernel counts.pod conunts are taken into account we will see smaller yields… USDA is conservative on exports…The USDA is assuming a 6 mmt contraction in World grain trade… limiting their write up in exports…so we will see…"
The USDA released bullish/bearish data in its August Production, Supply/Demand Reports Thursday.
For the U.S. crop, the USDA estimated the 2010-11 corn yield at 165 bushels per acre, vs. the average analyst estimate of 164.1 and the USDA’s July estimate of 163.5 bushels per acre.
For soybeans, the USDA estimated the 2010-11 yield at 44.0 bushels per acre vs. the average analyst estimate of 43.2 bushels per acre and the USDA’s July estimate of 42.9.
The numbers the market is focused on are the U.S. grain carryout estimates, world wheat grain production figures, and the world carryover estimates.
What makes this report bullish is the USDA’s 2010-11 world wheat carryover estimate at 174.8 million metric tons, sharply lower than its July estimate of 187.1 million metric tons.
Early calls for the commodities are higher, according to the CME Group floor traders. Corn is seen up 4-6 cents higher, soybeans up 5-10 cents, and wheat up 10-15 cents.
For the U.S. 2010-11 wheat carryout, the USDA estimates 952 million bushels vs. the average analysts estimate of 982 million bushels, and the USDA’s July estimate of 1.093 billion bushels. For 2009-10, the USDA estimated wheat carryout at 973 million bushels vs. the government’s July estimate of 973 million.
For corn, the USDA estimated the U.S. 2009-10 carryout at 1.426 billion bushels vs. the average analyst estimate of 1.459 billion bushels and the USDA’s July estimate of 1.478 billion. USDA estimated the 2010-11 corn carryout at 1.312 billion bushels, compared to the average analysts estimate of 1.307 billion and the USDA previous estimate of 1.373 billion.
For soybeans, the USDA estimated the U.S. 2009-10 carryout at 160 million bushels, vs. the average analysts estimate of 166 million bushels and the USDA’s July estimate of 175 million. Also, the USDA estimated the 2010-11 U.S. soybean carryout at 360 million bushels, compared to the average analyst estimate of 334 million and the government’s July estimate of 360 million bushels.
World Grain Production
USDA estimated Russia’s 2010-11 wheat production at 45.0 million metric tons vs. 53.0 million bushels.
More in a minute,
08-12-2010 08:06 AM
Corn yield..... Biggest we will see..... Not enough to meet demand..... Market should have bought more acres last winter.......
Soy yield..... A lot needs to go right over the next 45 days to see 44......
08-12-2010 09:56 AM
Looks like if you were a bull before the report your still a bull if you were a bear before the report your still a bear. I'm am a little suprised we are so strong with the outside markets so weak.