07-12-2011 06:34 AM - edited 07-12-2011 01:29 PM
At the close:
The Dec. corn futures settled 25 1/4 cents higher at $6.58. The Nov. soybean contract closed 11 1/4 cents higher at $13.58 1/4. The Sep. wheat futures settled 32 3/4 cents higher at $6.72. The Dec. soybean meal futures contract closed $3.20 per short ton higher at $354.90 and Dec. soyoil futures settled $0.60 higher at $57.32.
In the outside markets, the NYMEX crude oil is $2.14 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 6 points.
The Dec. corn futures are trading 15 cents higher at $6.47 3/4. The Nov. soybean contract is trading 1/2 of a cent higher at $13.47 1/2. The Sep. wheat futures are 7 3/4 cents higher at $6.47. The Dec. soybean meal futures contract is trading $0.30 per short ton higher at $352.00 and Dec. soyoil futures are trading $0.21 lower at $57.05.
In the outside markets, the NYMEX crude oil is $0.11 per barrel higher, the dollar is higher and the Dow Jones Industrials are up 11 points.
The floor is the quietest I've heard it in a long time. The corn futures pit is practically empty.
At the open:
The Dec. corn futures opened 5 3/4 cents higher at $6.38 1/2. The Nov. soybean contract opened 1 cent lowerr to 1 cent higher at $13.48. The Sep. wheat futures opened 2 1/4 cents higher at $6.41 1/2. The Dec. soybean meal futures contract opened $0.80 per short ton higher at $352.50 and Dec. soyoil futures opened $0.26 lower at $57.00.
In the outside markets, the NYMEX crude oil is $0.11 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 44 points.
I'm hearing higher Early calls for corn, but the wires are running a lower corn call. So, take your pick, I guess.
USDA announces Tuesday that 233,000 metric tons of U.S. corn was sold to an 'unknown' for 2011-12 delivery.
The USDA Reports were bullish corn, negative beans, and probably neutral to friendly wheat. Early calls: Corn 5-7 cents higher, soybeans 5-10 cents lower and wheat neutral-to-friendly. Traders think the European debt crisis will be the leader of these markets today. So, watch the prices get pulled downward.
2011-12 Corn carryout at 870 million bushels vs. 1.013 billion. Old-crop at 880 million bushels.
2011-12 Soybean carryout at 175 vs. 172 analysts estimate and 2010-11 soybeans at 200 million bushels vs. 193 trade estimate.
Because we were looking for hefty corn stock numbers and didn't get them, this report is friendly for the corn market, one floor trader says.
--Matt Pierce, GrainAnalyst.com and CME Group floor trader says, "Mildly supportive corn. Neutral for wheat and berans. Nothing dramatic with new crop corn getting the best bids. No one will short it now heading into a weather problem after funds dumped almost 200K off their longs."
--Another trader says, "I view this as not bearish at all at least in terms of supply and demand. The increase in ending stocks estimates had to be expected in response to the June 30 reports and could have been higher. But, the lower prices now should help demand it seems. Winter Wheat production a little higher than I would have thought, but the crop must be out there. No prob with the Spring estimates. Corn and sbs new crop estimates just acreage with trend line yields, so nothing special there. Given the recent selling pressure I would say that prices could even work higher on this, but we will see with the dollar, etc."
--Another analyst says, "USDA took the extra bushels in the Grain Stocks report for corn and added it to usage. Of the 350 million bushels that they found at the end of June, we found a home for 250 million bushels.
+50 million in feed usage
+100 million in ethanol usage
+100 million in exports
At these lower corn prices, profitability has returned to the end users so we agree with increasing demand.
While we find the June 30th Stocks report to be a continued mystery, this report makes some sense as to where they added the usage.
In our view, the Harvested Acreage of corn will still be adjusted lower."
Old crop soybeans were up 10 million bushels
New crop soybeans were down 15 million bushels. A slight reduction in yield was noticed in the soy complex
In our view the soy yield is still a little too optimistic but overall the demand figures are in line with expectations.
--Japan seeks 139,411 metric tons of wheat for Sep. delivery.
--South Korea bought 110,000 metric tons of U.S. No. 3 or better yellow corn for Oct. ad Nov. delivery.
--Brazil is expected to plant a record 24.9 million hectares in 2011-12, a Brazilian consultancy says. If realized, it woud be the fifth year in a row Brazil that soy acres increased.
--USDA Crop Progress Report left ratings similar to last week's numbers.
Early calls are subject to this morning's USDA July Production, Supply/Demand Reports, that will be released at 7:30am CDT.
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.89 lower.
Wall Street=Seen trading lower as European debt worries compund.
More in a minute,
07-12-2011 07:29 AM
A floor trader made $500,000, last year, putting in a wild bid right at 7:15am, just as the overnight's closed. And since it worked for him, a lot of other people are now trying it. He made his money on a day when the nearby contract had no limit. That particular day, the market went double limit up.
07-12-2011 07:34 AM - edited 07-12-2011 07:40 AM
2012 ending stocks of 870M up from 695- what does it all mean Mike? seems around expectations to me
dont tell me the market isnt going to swing 30 cents on a USDA report!!?? Say it isnt so
07-12-2011 08:19 AM
One of these days, maybe today, would be an excelelnt time for the crazy algo that has been migrating through other markets to get turned loose on grains, probably corn.
Nothing to be done about it other than to proceed with the expectation that at any moment there could be a 40 or 60 cent range in a minute or less which makes the use of stops and most reasonable theories of order entry irrelelvant.
If you have the time and patience I think the way to play a lot of markets is just to continually have in and updated orders way out of the money on both sides of the market.
Of course it is a lot of work to get them in and most importantly get them out.
07-12-2011 08:32 AM - edited 07-12-2011 08:37 AM
I have had one corn trader explain that China's corn imports is the reason Tuesday's report is friendly for the corn market. The USDA had China importing 2.0 million metric tons of U.S. corn in 2011. They have already surpassed that. So, if China imports 5.0 mmt that new-crop U.S. corn carryout goes from 870 million bushels to 750 million. And, if they import 10.0 mmt in 2011-12 that carryout number drops to 630 million bushels.
Separately, a contact of mine just returned from China. His ground report indicates China is in need and can't grow what they need. In his own words:
"China can’t grow enough corn to meet their demand. They probably will never be able to grow enough corn for demand. Most corn is for feed. China has been raising rates to tighten inflation. They could have the same problem we have, real estate. Overbuilding and the bubble bursts. I don’t see why China’s tightening economic growth would slow purchases of US soybeans? A billion-plus people have to eat. Soy is a huge part of their diet. Wheat looked good to me in the Henan Province. Harvest was in full throttle. They use miniature combines by the semi load and go north to south field by field. Some harvest still done by hand. Summer corn was being planted in wheat fields down south and up north the spring corn looked good but the problem is they just can’t grow enough."
07-12-2011 10:20 AM
Notice: The CME Group will host a meeting on corn futures daily price limits. This meeting will be held July 19, 2011 at 2pm CT. If you are interested in attending, you can do online. I'll find ou the details on that later. But, I wanted to let you know that this meeting is for all corn futures market participants, according to the CME Group folks.
The thrust of the meeting is designed to discuss the Exchange's recent proposal to increase daily price limits. I'm curious, do you think they should raise limits for corn?