03-31-2011 06:34 AM - edited 03-31-2011 01:46 PM
Wheat used some bad crop-weather to push higher, aside from riding the coattails of a bullish corn, soybeans USDA Quarterly Stocks Report Thursday.
"In addition, Canada's wheat is wet with a lot of snow up there. The Dakota's remain wet with snow, so wheat planting delays could occur with those states. That's friendly for the wheat market. So, even though the report was negative for the wheat market, crop-weather concerns were positive," Bedore says.
As far as the corn market, it is expected to push up towards the May contract's high of $7.44, sometime next week, traders say.
"With Dec. corn making contract highs, I see the May reaching that $7.44 next week."
Having said that, the corn contract spreads are not supporting that push to a $7.44 level, Bedore says. "July/Dec spread should be around $1.15-$1.20, to test that May high. It went out today at $1.03. So, that worries me a little bit."
Overall, the market is facing traders that are holding 'long' positions that are taking profits and will need to eventually get back in. There are traders that are 'short' the market that need to find a way back in. Also, traders that are short corn/long beans that want out of their short corn positions.
Other thoughts include soybean acres could increase with wheat planting delays in the Dakota and Minnesota states, Bedore says.
At the close:
The May corn futures closed locked 'limit' up the daily maximum 30 cents at $6.93 1/4. Synthetically, in the options pit, the May corn futures contract settled at $7.32, that 's 39 cents above the futures 'limit up' price. The May soybean contract closed 36 3/4 cents higher at $14.09. The May wheat futures closed 36 cents higher at $7.63 1/4. The May soybean meal futures ended $10.20 per short ton higher at $370.70. The May soyoil futures closed $1.46 higher at $58.78.
In the outside markets, the NYMEX crude oil is $2.18 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 7 points.
Tomorrow's corn 'limit' will move to 45 cents. Well, the synthetic corn market traded 39 cents over the daily 'limit' today. So, many traders see the corn market opening up 25-30 cents Friday. And, if the buying shows up, the corn market could go 'limit' up again.
Wheat is 45 cents higher. The worsening drought in the Plains is helping that market. Plus, soybeans are 45 cents higher. Corn still locked limit up.
Floor story: Just left the men's room. One trader was telling his sob story. He got long on all of those dips in the corn market. He was getting nervous after China supposedly came in and bought U.S. corn but it couldn't be verified. And when the market started to dip again, he thought how long can I take this market going in the wrong direction/ How much of this profit do I want to lose? So, he was 'long' the market until, literally, yesterday. And today, he's kicking himself.
The May corn futures remain locked 'limit' up the daily maximum 30 cents at $6.93 1/4. Synthetically, in the options pit, the May corn futures contract is trading between $7.21-$7.28, that 's 30 cents above the futures 'limit up' price. The May soybean contract is 36 3/4 cents higher at $14.09. The May wheat futures are 36 3/4 cents higher at $7.64. The May soybean meal futures are $9.50 per short ton higher at $370.00. The May soyoil futures are $1.43 higher at $58.75.
In the outside markets, the NYMEX crude oil is $1.93 per barrel higher, the dollar is lower, and the Dow Jones Industrials are down 6 points.
Synthetically in the options pit, the May corn futures contract is trading between $7.21-$7.25, that 's 30 cents above the futures 'limit up' price. For this reason, one trader says, "Corn will be limit up tomorrow, again. We won't trade this market today or tomorrow."
At the open:
The May corn futures opened up at its daily 30 cent limit at $6.93 1/4. The May soybean contract opened 60 cents higher at $14.31. The May wheat futures opened 23 3/4 cents higher at $7.51. The May soybean meal futures opened $15.00 per short ton higher at $375.50. The May soyoil futures opened $2.08 higher at $59.40.
In the outside markets, the NYMEX crude oil is $1.80 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 26 points.
What's interesting is all corn contracts have locked limit up. Off the report, it was thought just the nearby contracts, not new-crop would go limit. Soybeans are actually falling right now.
Well, what did you think of the "livestream" broadcast from the floor? On my computer, it came across well.
State-by-state corn breakdown:
Iowa=Up 500,000 acres vs. a year ago
Neb.=Up 350,000 vs. a year ago
KS, Ohio= Up 250,000
IL, MN.=Up 200,000
WS, MO= Up 150,000 acres
Mich.=Up 100,000 acres
All crop plantings were up 13.0 million vs. year ago. Where did they get all the extra acres?
One analyst says:
"Bullish for corn and beans no doubt about it, not so for wheat and rice. Plantings bullish for cotton too. Should be sharply higher corn and beans, with the rest following. I am saying at least +10 for corn, maybe +10 wheat, at least +20 for beans for now."
Yet another analyst says:
"Corn and bean numbers are all potentially bullish in the long term as growing season weather takes a heightened level of importance but all the numbers were in line with expectations with no shocker or surprise. We come in Friday and say what report, it's not what you plant but what you grow, how's the weather."
Yet another analyst says:
"Grain Stocks were bullish to corn/soy, neutral slightly negative to wheat.
Acres were in line, a little higher on corn, a little lower on soybeans.
All focus should be on STOCKS, TIGHT TIGHT SUPPLIES OF CORN/SOY
The buzz is the 2011 Quarterly Grain Stocks, for corn and soybeans, are bullishly tight. One trader says, "Who cares what we're going to plant, we're running out of what we have."
By the way, the USDA Weekly Export Sales huge for corn Thursday at 2.20 million metric tons. Wheat sales were 410,000 metric tons. Soybean sales came in at 257,800 metric tons.
2011 U.S. corn acres=92.2 million, compared to the average trade estimate of 91.662 million, and the 2010 corn seedings of 88.192 million.
Soybeans=76.6 million acres, vs. the average trade estimate of 76.969 million and the 2010 seedings of 77.404.
Wheat=58.0 million acres, compared to the average trade estimate of 41.150 million.
Early calls: Old crop corn limit up, soybeans limit up, wheat to follow.
The tight stocks for corn and soybeans are the driver.
Corn=6.52 billion bushels vs. the trade estimates of 6.701. BULLISH
Soybeans=1.25 billion bushels vs. average trade estimate of 1.295. BULLISH
Wheat=1.42 billion bushels vs. average trade estimate of 1.399. Friendly
Reaction coming up........
It's interesting to note that soybean futures have fallen on Planting Intentions Report day eight of the last 10 years. Also, traders are saying it's not how we open, it's how we close. Unless, you expect a bullish report and want to sell the open.
Separately, an Isreali group has tendered for 24,000 metric tons of corn from either the U.S., South America, and some other countries. The group is also looking to buy 34,000 metric tons of corn products and 8,500mt of soymeal.
Early calls: Subject to the USDA Planting Intentions and Quarterly Stocks Reports to be released at 7:30am CST. Overnight grains are trading mostly lower, with corn and wheat down 2 cents, soybeans are 4 higher. The outside markets are favorable for grain trade. But, the USDA numbers will dictate the opening bell today. I'll have the numbers for you and Early calls at 7:35am.
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$1.15 higher.
Wall Street=Seen trading in a tight range on the final day of the month.
World Markets=Asia/Pacific is higher, Europe stocks lower.
More in a minute,
03-31-2011 07:51 AM
Vulgar and obcene! That cotton number is really screwed up. What were the stocks numbers?
I know these are the numbers but I got some real problems with them! But on the bright side milk is gonna get more expensive. FAST!
03-31-2011 07:54 AM
JR, here are the Stocks #s for the grains.
So, who's buying who the cinnamon roll this morning?!
03-31-2011 08:01 AM
Hi, Grossman. We'll have the stream here in Marketing Talk. Check here in a few minutes and we'll be up and running as soon as they patch the feed through.