11-01-2010 07:05 AM - edited 11-01-2010 03:26 PM
After the close:
FC Stone estimates U.S. corn yield at 154.1 and crop at 12.523 billion bushels. The firm pegged soybean yield at 44.9 bu./acre and the crop at 3.449 billion.
One trader says he is surprised that FC Stone dropped their corn number that low. The bean yield he can handle, he says. Meanwhile, the USDA released a weaker wheat rating. The trader says the overnight markets will be all over that.
At the close:
The Dec corn futures settled 4 3/4 cents lower at $5.77 1/4. The Jan. soybean contract settled 1 cent lower at $12.35. The Dec. wheat futures closed 14 3/4 cents lower at $7.02 1/4. The Dec. soymeal futures contract ended $0.10 higher at $337.80 per short ton. The Dec. soyoil futures contract closed $0.45 higher at $49.75.
In the outside markets, the NYMEX crude oil is $1.51 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 44 points.
As the 'roll' starts, one trader says that he finds the market doesn't go in any real direction, during a 'roll' period, just a bunch of noise.
As we head to the close, beans are higher and that's it. One floor trader says there is some index 'rolling' of positions going on today from Dec. '10-Dec. '11. And more is expected all of this week. He says he is hearing Informa's corn yield estimate tomorrow is going to be close to the government's. FC Stone releases a new yield number later today. The Nov. USDA report should be a final number, he says. So, there is a lot of attention on that upcoming report. Beyond that, he sees specs being very active in January, buying Dec. '11 corn, Nov. '11 soybeans, July '11 wheat. He thinks China is upside down on their corn, they will come in one day and buy up the world's corn supply. He says the fact is the world wants a lot more corn acres in 2011. With cotton prices so high, the U.S. South acres will go away from corn and soybeans into cotton. The crop that loses is wheat, he says.
All grains remain lower. One analyst says, "Price action has been kind of disappointing for the bulls given that the Dollar is not doing much and that most commodities had a pretty strong night overnight. But, kind of quiet and not holding too well today. I think we are seeing some spec money come off the table due to the fed announcements this week as much as anything. People are pretty worried about what direction the Fed will go and also what will happen tomorrow in the mid term elections. Been hard to get people to trade due to these factors. Most of Latin America and any other Catholic part of the world is shut down today for All Saints Day and lots of people are out tomorrow which is not helping any, either. Demand news was pretty good with interest in corn and wheat over the weekend, so I expected a bit better market."
The Dec corn futures are 2 3/4 cents lower at $5.79 1/4. The Jan. soybean contract is 3 cents lower at $12.33. The Dec. wheat futures are 10 1/4 cents lower at $7.07. The Dec. soymeal futures contract is $2.30 lower at $335.40 per short ton. The Dec. soyoil futures contract is $0.44 higher at $49.74.
In the outside markets, the NYMEX crude oil is $1.87 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 50 points.
The markets are lower due to a technical sell-off, traders say. Otherwise, the outsides are going against the grains too. The floor is really quiet. Traders are sitting in the pits with their hands folded.
By the way, add to this week's list of 'shoes to drop' FC Stone and Informa updated yield estimates. FC Stone releases its new estimate around 3pm, Informa tomorrow. FC Stone is expected to come in lower than its last estimate of 159.2.
Good to see the sun this morning. Well, this week, the experts are saying the grains and the stock markets could be volatile. You have the Fed Reserve & Europe's Central Bank meetings, U.S. elections, reports on job and housing, the dollar watch, and last but not least the the space shuttle Discovery launches on its final mission.
My question back to you is how are you planning to trade this week? Are you on the sidelines? Do you have crop that you need to get sold? Are you done selling old and new crop or do you have some new-crop yet to price? Not knowing which way the wind is blowing on all those factors on-tap this week, what is your approach? Just curious.
Early calls: Corn up 2-4 cents, soybeans up 1-2 cents, and wheat up 2-4 cents.
Overnight grain=Trading higher.
Crude oil=Trading $0.73 per barrel higher.
Wall Street=Seen higher off of higher Chinese manufacturing data and upcoming U.S. manufacturing data.
11-01-2010 08:29 AM
I think we are still looking at the contination of the recent bullish run. The short term turbulance in terms of event drivers is high but if we keep eyes on horizon the macros are very firm. In particular many of the unknowns surrounding the 2010 northern hemisphere harvest have been resolved and markets have had to look forward to find new direction.
Nobody yet is pitching a lower crop figure for Australia but part of last weeks rally was down to concerns over production in the southern hemisphere. Overly dry conditions in Western Australia and too much rain in the east, where harvest is underway, were the key problems.
Concerns over the 2011 crop are also here. As you know dry weather in the US wheat belt is hampering the development of the winter sown crop – unseasonal recent storms have not been sufficient to dispel worries and longer term forecasts are pointing to a return to dry conditions. Additionally the Russian Agricultural Minister was reported this week to be estimating their winter sowings this year to be close to 38 million acres which is down from an earlier forecast of 45 million acres.
All this means that there might be pullbacks but the roll into year end looks good from where i sit.
11-01-2010 03:27 PM
Mike: Those numbers from FC Stone are lower than their earlier estimates, according to you story on the site here somewhere I see.
That fact have any legs with anyone tomorrow, you think? Is this the start of a little something on crop projections?
11-02-2010 06:23 AM
Your question about how to trade this is an interesting one. I can forward contract corn and inputs and have a very workable situation. Problem comes if the fed decides that inflation is the best way out of the current and ongoing budget disaster. I guess the best stuatioin is to sell hta and buy high priced calls.