06-20-2011 06:52 AM - edited 06-20-2011 02:23 PM
At the close:
The July corn futures settled 1/4 of a cent lower at $7.00 1/2. The July soybean contract ended 2 3/4 cents higher at $13.35 3/4. The July wheat futures settled 13 cents lower at $6.59 1/4. The July soybean meal futures settled $1.00 per short ton higher at $350.00 and July soyoil futures closed $0.10 higher at $56.02.
In the outside markets, the NYMEX crude oil is $0.21per barrel higher, the dollar is higher and the Dow Jones Industrials are up 76 points.
One broker says, "A quiet market today, mostly some spec buying in the beans and a little in the corn. People seem content to blast on the wheat now with harvest on, but the beans got some help from oversold ideas and maybe corn caught in between. I think people want to see the crop ratings tonight but really want to see things get a little more sure in the world econ before getting too excited about life."
Meanwhile, this analyst agrees the market was relatively quiet Monday. he says, "The corn and soybeans tried to rally on supportive weather (too wet) with heavy rain coming this week. Those markets tried to draw some support from the fact that the outside markets were very supportive, with all livestock markets closing sharply higher (all profitable) using corn at these values," he says.
For wheat, it's a market that continues to move lower on fund selling (now short) and harvest progress, he says.
"This weaker wheat market keeps the idea floating around the trade that more corn usage will move to wheat. While I believe some wheat will move into the corn ration, in my view it won’t be enough to significantly impact usage. It is more the fund selling that is pressuring price than the actual wheat being consumed over corn," he says.
Meanwhile, hedge fund managers may be playing their long positions close to their vest, with the uncertainty of the European situation, he says. "This is trumping any and all positive fundamentals that I mentioned above."
Question: As the G-20 agriculture ministers meet this week for the first time, what would you like them to find a solution for:
A) Food-price volatility (Which is on their agenda)
B) U.S./Brazil cotton dispute
C) World grain stocks transparency
D) China's currency management
F) Commodity Speculation
Or, if you don't care about this meeting of the ag minds, share why you don't, please.
USDA announces Monday that China bought 120,000 metric tons of U.S. soybeans for 2011-12 delivery.
Man, is it ever raining this morning, here in Chicago. Anyway, I digress.
--Saudia Arabia bought 360,000 metric tons of U.S. and European wheat for Sep.-Oct. delivery.
--Stat of the week: Last week, the July corn trading range was as wide as the Dec. 2005 corn futures contract traded all year. Now that is something. One whole year's of price ranges in one week! Thanks to Al Kluis, Kluis Commodities for sharing that market statistic this morning.
Early calls: Corn 1-2 cents higher, soybeans 2-4 cents higher and wheat 1-2 cents lower.
Overnight grain, soybean markets=Trading slightly higher.
Crude Oil=$1.29 lower.
Wall Street=Seen trading lower as Europe stock's fall. On Sunday, the European Union finance ministers failed to release relief monies for Greece. Now, U.S. banks that are tied to Greece could see lower share trading Monday.
More in a minute,
06-20-2011 08:35 AM
Morning MIke it just finished raining here. My daughter is off to Church camp this week and my wife is gonna be a counselor. They are in for mosquitoe heaven!
I don't know how much good the ag meetings will do but My biggest thing is the Brazil/US dispute. This is gonna get real ugly real fast. What happens if Brazil puts restrictions on meat and milk? Livestock doesn't need to get beat up again by the exporters.
The volatility isn't an issue cause it is tied to currency more than speculation. Therefore they need to get the currency thing fixed. If the Currency problems would be fixed the speculation would be decreased and the volatitlity along with it.
06-20-2011 09:11 AM
First thought was to ensure all farmers make a profit, but then everyone would want to farm! So how about that all no-till farmers with less than 5,000 acres and an inheritance plan make a profit?
Keep up the great work, we in Japan enjoy your news everyday,
06-20-2011 09:28 AM
Mike...... The only reason that they are meeting is IMO to get the price of food and fiber back down where it should be...... The world hates it when they let farmers into a position that there is a buck or two to be made..... After all we are only suppose to be the peasants any way....... p-oed
06-20-2011 11:27 AM
Something has been on my mind for quite some time, but I'm not sure it would be a topic for the G-20 meeting.
Many discussions over ethanol, government subsidies, ag policy, etc. seem to lack the concern that we should have about the possibility of a crop failure. We spend so much time and effort hashing out whether the government should subsidize ethanol and discussing the role of government in agriculture. In my opinion we are missing the most important issue ... how will our country (and the rest of the world) cope if faced with a natural disaster that causes food shortages unlike anything we have seen in recent history?
I find it hard to believe that a developed nation of 300 million people permits the corn carryout to fall below 700 million bu. We seem to be banking on another 13 billion bushel crop. What would happen if we experienced a "dust bowl" -like phenomenon over a period of several years? What would happen when a volcano erupts and blots out the sun for a summer? These events will happen. We have been in a very docile period historically and we are woefully unprepared.
It seems a country such as the US should be working towards storing and owning two billion bushels of corn annually and at least a billion bushels of wheat. Empty the bins just before every harvest and refill them. Now, I know that we couldn't afford to give up that much all in one year, but I can't see why we wouldn't work towards a goal of holding grain. It really is a matter of national security.
... Just some thoughts as I spend many hours riding around in my sprayer. Go ahead... tell me I'm nuts!
06-20-2011 12:43 PM
G-20 meetings historically are bad for the markets short term,
On the flooding note, Hiway 2 east of Neb. CIty has been closed, all four lanes have water FLOWING OVER them. and there is some concern of levees breaking near nebraska city.
I feel for those guys,
06-20-2011 12:54 PM
i think they can NOT control prices, no matter how much they want to do it, but can not do it. In Argentina we know how much they can fail on controling prices.
but i rekon they can stop some money from the funds in order to have less volatility, (some less, not all)
i think is more effective they way China handles the high prices than the G 20 wants to do ir.....when they get to this levels, China starts to change contracts or invent some parameter so the comoditty is not safe, etc.... this big buyer has more power to control prices than the G 20
06-20-2011 05:30 PM
They are there for two reasons
1 Justify their gov't wages and go to the Paris air show on their gov't dime.
2 Complain loudly how biofuels are starving the world and agriculture is to heavily subsidized. Gov'ts can balance their budgets by cutting ag subsidies!
Do you think any of these people will tell you they are overpaid pundits ?
Their Economics 101, lets lower the price of grain and the worlds farmers will raise more food!
06-21-2011 09:28 AM
As I've stated previously, we are in the 'danger zone'. The last time I said that was prior to 2007-8. Now we may make it through with no supply problems and then some will say 'what me worry'. But the risk is there, and as last time, it's already too late for course corrections if we have some production problems.