11-09-2010 06:39 AM - edited 11-09-2010 02:20 PM
At the close:
The Dec corn futures settled 9 cents lower at $5.76 1/4. The Jan. soybean contract closed 54 1/4 cents higher at $13.29. The Dec. wheat futures ended 14 1/2 cents lower at $7.21 1/4. The Dec. soymeal futures contract closed $17.50 higher at $363.90 per short ton. The Dec. soyoil futures contract settled $1.36 higher at $53.73.
In the outside markets, the NYMEX crude oil is $0.33 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 27 points.
One analyst says there is room for more upside tomorrow.
The Dec corn futures are 2 3/4 cents higher at $5.88. The Jan. soybean contract is 54 cents higher at $13.28 3/4. The Dec. wheat futures are 4 1/4 cents higher at $7.40 1/2. The Dec. soymeal futures contract is $16.90 higher at $361.80 per short ton. The Dec. soyoil futures contract is $1.41 higher at $53.42.
In the outside markets, the NYMEX crude oil is $0.05 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 39 points.
The outside markets have reversed, namely the Dollar going from lower to higher. That is hurting the grain rally.
One analyst says, "Soybeans were the surprise.. and so they show relative strength... everyone long options and corn spreads so looking to take profits... I think it's a rational trade with corn +5 and beans up +50.....I do think prices need to move higher still," he says.
Yet another grain analyst says, "They traded the numbers as they came out , mildly bullish corn and wheat but very bullish beans taking January to two cents from limit up but funds fat with profits began taking profits right on the opening. That's report day normalcy , price in the report then go to the bank with it.
He adds, "The close tells us the trend near term. Lower closes means more selling ahead,
as this is the last bullish report until January. But, a higher close and
stock funds will take us to new highs tommorrow . THE CLOSE KNOWS."
The corn and wheat markets have backed off a bit. Corn, jumping over $6, did hit a 27-month high, soybeans, trading way over $13, reached a 2-year higher. Soymeal also hit an 18-month hitting over $358.00.
It's interesting to note that the Dollar has reached unchanged.
At the open:
The Dec corn futures opened 14 3/4 cents higher at $5.99 3/4. The Nov. soybean contract opened 64 1/2 cents higher at $13.29. The Dec. wheat futures opened 23 cents higher at $7.59. The Dec. soymeal futures contract opened $13.10 higher at $358.00 per short ton. The Dec. soyoil futures contract opened $1.53 higher at $53.90.
In the outside markets, the NYMEX crude oil is $0.40 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 7 points.
I'm getting word that floor traders think that soybeans will be strong all day, 30-70 cents higher all day. One trader says, "I think corn will fail. Over-the-counter trade is 15 higher in corn and 40-50 higher in beans."
Early Calls: Corn 10-12 cents higher, soybeans 20-25 cents higher, wheat 10-12 cents higher
MORE REACTION: One floor trader says, "Shocking decline in bean ending stocks due to production drop. Corn looks supportive but I bet the trade fades the rally over $6.00. Wheat is neutral to slightly supported. Look for wheat to gain against corn on the day.
World numbers were neutral for wheat and corn with Chinese production 2MMT higher! World beans flat on higher arg production.
He says, "My calls are beans +30, corn +10 (I want to sell it) and wheat +10+15 on sympathy and spread reversals."
One trader says, "Well, the report for soybeans is bullish and it is the feature of the report. Less production than expected leading to mush lower ending stocks than expected. We were higher overnight and I see no reason not to hold a 20 or 25 higher opening call and maybe more. Corn was dead on expectations, but not bearish at all and should hold its 10 higher overnight depending on the beans. Wheat a disappointment maybe, but can hold 10 higher as well. Rice looks a little disappointing too. We will see, beans should be the leader today."
REACTION: One analyst says, "Bullish beans, bullish corn, neutral wheat (but will be pulled higher).
Carryout on beans is 185, which is 60 million bushels under the trade estimate which is 25% less (A LOT). Any problems in S. America and we see $15 soybeans, maybe more.
I like all the corn numbers, we thought 154 bushels/acre. They raised corn used for ethanol by 100 million (based on Sept and Oct figures I agree 100%) and exports were reduced by 50 million bushels. Since the Oct report we haven't had any solid export sales so can't disagree there.
Hopefully the yield doesn't go down further in future reports, but honestly odds are high that it does. End users (especially livestock) are in trouble financially."
Yet another analyst says: "The surprise is the 2010-11 bean ending stocks at 185 m.b. versus265
last month a genuine threat to run out in 2011 if price doesn't go high
enough to ration the crop."
BULLISH REPORT: The USDA pegged the U.S. 2010-11 corn production at (12.540 billion bushels) compared to its October estimate of 12.664 billion and the average trade estimate of 12.545 billion bushels.
The government reached that total production figure by estimating the average corn yield at (154.3 bushels per acre), below its October estimate of 155.8. Tuesday’s yield estimate is below the average trade estimate of 154.4 bushels per acre. U.S. corn 2010-11 carryout was lowered to 827million bushels, lower than the average estimate of 840 million.
For soybeans, the USDA estimates the 2010-11 production at (3.375 billion bushels), vs. an October estimate of 3.408 billion bushels and an average trade estimate 3.426 billion.
In its report, the USDA pegged the 2010-11 soybean yield at (43.9 bushels per acre) vs. its October estimate of 44.4 and the average trade estimate of 44.6 bushels per acre.
Early calls for corn, soybeans and wheat are subject to the USDA's Crop Production Report at 7:30am CST. We will have the numbers and reaction right here. The overnight grain markets are trading sharply higher off of a weak dollar.
Overnight grain markets=Trading sharply higher.
Crude Oil=$0.26 higher and has hit a 2-year high.
Wall Street=Seen trading higher as the Dollar weakens.
More in a minute,
11-09-2010 07:53 AM
Just remeber the demand number can really change alot now. THey all agree that rationing must sart so that means we need to feed less as with a weaker dollar exports will continue and ethonal will stay competitve as oil goes higher.
SO that leaves livestock to cut demand. WHo blinks first hogs or Dairy cows? My bet dairy cows with most cattle being farther away from the processor there is more middle men to gothru. Good luck guys market well. JR
11-09-2010 08:04 AM
I know Ontario is just a wee drop in the big ocean but here it will not be dairy, they are protected quite well. Swine has already shrunk by 10%. Will there be more? I expect there could be, banks are rumoured to be just waiting for an uptick to get better return from shutting down operations that are too deep to ever crawl out. Will they wait longer with higher feed prices and swine prices so low?
One saving is those who grow their own corn have, for the most part, record yields.
There is also lots of supply in Ontario of both corn and beans. Record yields in most areas have left elevators full and corn piled on the ground which is not a good practice in our climate. Maybe that will reduce the supply a little.
11-09-2010 08:22 AM
WOW, you don't suppose that we will be up 70 in beans and up 30 in corn by the end of the day, do you. I was amazed that s bean yield was lowered, makes you think they are stoking the South Americans fire to plant more bean acres. Cotton, looks like no limit , could see $2 before the end of the year.
11-09-2010 08:35 AM - edited 11-09-2010 08:50 AM
It does seem like there is no ceiling for this thing. However, there is talk that the funds come into this report fat with profits and could be inclined to sell-off this market. We'll see. We could see quite the run-up in the first hour or so and then as the session goes on some profit-taking. The wildcard is that even once the traders decide to fade the market, you still have a weakening Dollar that could hold-up any attempt to decline. Keep in mind, there was strong support for today's market even without this report.
11-09-2010 09:01 AM
Ummm . . . another "shocking" report! Wonder what people pay brokers for? I am sure the "smart farmers" already locked in beans at $8.50 and corn at $3.75, and again missed this opportunity. How much has your talking heads really cost you in lost revenue this year because you pulled the trigger too soon. If you farm in Iowa you already took the hit, because farmers in Iowa have a real problem with not being with the herd as they go over the buffalo jump. I just got a new shipment of shovels in so you can go out behind the barn and dig your grave. Just love the USDA comic books, and the "shocked" comments coming from those who are supposed to know what they are doing. Farmers got "farmed" again this year. This is just too much fun! Wonder if the Streets of "Woden Iowa are full again this year?" What a joke! Adios Amigos. John
11-09-2010 09:48 AM
Hey, Jed. Here's what USDA had to say for cotton and rice. First, for cotton:
(From Crop Production):
All cotton production is forecast at 18.4 million 480-pound bales, down 2 percent from last month but up 51 percent from last year’s 12.2 million bales. Yield is expected to average 821 pounds per harvested acre, up 44 pounds from last year. Upland cotton production is forecast at 17.9 million 480-pound bales, down 2 percent from last month but 52 percent above 2009. Producers in Texas and Oklahoma are expecting decreased yields from last month. American Pima production, forecast at 497,800 bales, was carried forward from last month.
COTTON: The U.S. 2010/11 cotton supply and demand estimates include lower production, lower domestic mill use, and higher exports relative to last month. Production is lowered 455,000 bales to 18.4 million, as reductions for Texas are partially offset by increases in the Southeast and Delta. Domestic mill use is reduced 150,000 bales to 3.45 million in response to recent sharply higher prices. Exports are raised 250,000 bales to 15.75 million, based on increased foreign demand and extremely strong export sales to date. Ending stocks are reduced 500,000 bales to 2.2 million bales, the lowest since 1925. The forecast range for the marketing year average price received by producers of 74 to 86 cents per pound is raised 7 cents on both ends. The midpoint of the range, if realized, would be the highest price since the Civil War.The 2010/11 world cotton forecasts show lower consumption and ending stocks compared with last month, stemming from reduced supplies. Beginning stocks are reduced 3.0 million bales in China, asWASDE-488-5the 2009/10 balance sheet is revised to reflect the shortages in mill inventories that have become apparent in recent weeks (see http://www.usda.gov/oce/commodity/wasde/index.htm for a detailed explanation). World production is reduced 1.4 million bales, as reductions for China, the United States, Pakistan, Greece, and Turkey are partially offset by increases for Brazil, Australia, and Uzbekistan. With supplies insufficient to meet demand, world consumption of 116.8 million bales is reduced 3 percent from last month and 1.4 percent from last season. Relative to last month, consumption is reduced in China, Bangladesh, Indonesia, Pakistan, Thailand, the United States, Vietnam, Brazil, and Turkey; these reductions are partially offset by an increase for India, where consumption is expected to benefit from export restrictions. World trade is raised nearly 800,000 bales from last month, as a 2-million bale increase in imports by China is partially offset by lower imports by several other countries. World ending stocks are reduced 5 percent to 42.2 million bales. The world stocks-to-consumption ratios are reduced to 37 and 36 percent, respectively, in 2009/10 and 2010/11, the lowest since 1993/94.
Now, for rice:
RICE: U.S. rice production in 2010/11 is forecast at 241.6 million cwt, 0.7 million below last month due to a decrease in yield. Average yield is estimated at 6,669 pounds per acre, down 18 pounds from last month. Harvested area is unchanged at 3.62 million acres. Long-grain rice production is lowered 0.5 million cwt to 181.5 million, while combined medium- and short-grain production is down 0.2 million to 60.1 million. The changes on the use side are due mostly to a reduction in the average milling yield for 2010/11. The average U.S. 2010/11 rice milling yield is lowered 2 percent to 67.5 percent, the lowest in at least 50 years. The average milling yield is determined from Farm Service Agency warehouse stored loan data for long-, medium-, and short-grain rice. Unfavorable hot August weather reduced both field and milling yields in the South. A lower milling yield results in a higher use of rough rice. Domestic and residual use is raised 2 million cwt to a record 129.0 million, however, exports are unchanged at 119.0 million cwt. The export forecast on a milled-equivalent basis is lowered 2 percent from last month, as lower exports are expected to markets primarily in the Middle East. An increase in the long-grain export forecast (rough-equivalent basis) of 1.0 million cwt is offset by a decrease of 1.0 million in combined medium- and short-grain exports. Ending stocks are forecast at 49.8 million cwt, down 2.7 million from a month ago, but up 13.1 million from the previous year.
The long-grain, combined medium- and short-grain, and all rice season-average farm price forecasts are all unchanged from last month at a range of $10.50 to $11.50 per cwt, $17.30 to $18.30 per cwt, and $12.10 to $13.10 per cwt, respectively.
Global 2010/11 rice supply and use are lowered from a month ago. World 2010/11 production is forecast at a record 451.4 million tons, down 1.1 million from last month due mainly to decreases for
Burma, Pakistan, the Philippines, and South Korea, which is partially offset by an increase for Australia. Thailand’s 2010/11 rice crop was lowered slightly as losses in the main-season crop from recent flooding are partially offset by an expected increase in the dry-season crop. The Philippines 2010/11 crop is lowered 0.3 million tons from last month due to the effects of Typhoon Megi, but is still up 0.7 million from last year’s weather-reduced crop. Global 2010/11 exports are lowered by about 0.35 million tons from last month as expected declines in the United States, Pakistan, Burma, and Thailand, are partially offset by a substantial increase for Australia. Import forecasts are raised for Bangladesh and Indonesia, but lowered for the Philippines and Australia. Global ending stocks for 2010/11 are projected at 94.3 million tons, nearly unchanged from last month, but a decline of 1.1 million from the previous year.