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Senior Contributor
ShelladyOptions
Posts: 899
Registered: ‎05-03-2010
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OptionEye.....Aug 14th

Good morning.

 

Feels like I am going to a football game this morning. Very Autumnal around here. I guess that is what has a lot of guys nervous about total production at the end of the year.

 

Corn seems to have totally debunked the USDA and gave back all of the report's gains. At some points we had 5 cent swooshes where there were no bids. A definite consequence of electronic trading but it gave the feeling of 'no bids below'. The last 10 minutes of the day yesterday was pretty hairy.

 

This morning we have beans down 12, corn up 1 and wheat down 2. The options trade is schizophrenic with no real direction over the last few days as investors digest the report and then ingest their own opinions.

 

Reports of a recovery taking place this morning in Europe (I don't believe it) have the talking heads all a twitter. It's not good enough to get stocks higher on the day as they are slightly lower. The 10 year is basically unchanged at 2.70%.

 

Oil is backing off .73 cents to $106.10 and gold is laying there, up $4.90 to $1326.56.

 

More economic news this morning puts the U.S. in the spotlight. It better be good.

 

 

Veteran Advisor
roarintiger1
Posts: 1,574
Registered: ‎04-29-2011
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Re: OptionEye.....Aug 14th

I read this morning that the traders are questioning of the way USDA formulated their latest yield prediction and have decided they made a mistake in lowering the yield.  There is renewed hope for a large crop insurance payment afterall.

 

There had better be a significant rally in the markets in February for insurance reasons......or else next year's corn acres are going to be much lower. Low prices again will cure low prices.

"Failing to prepare is preparing to fail." "Success happens when preparation meets opportunity"
Frequent Contributor
cornhead64
Posts: 53
Registered: ‎01-13-2011
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Re: OptionEye.....Aug 14th

48 degrees in SE Minny this morning - how long will it take for the corn plants to start growing today ?

Senior Contributor
ShelladyOptions
Posts: 899
Registered: ‎05-03-2010
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Re: OptionEye.....Aug 14th

Talk on the floor is that they used a 5 year average which brought the weights down significantly. Apparently, if they throw out a light/dryish 2012 and 2011 the weights would have been heavier. Again, this is the talk, but if they don't use the light/dry years the traders think that you would ADD 2 or 3 bushels to the USDA, not subtract 2.

 

Just the messenger...

Veteran Advisor
roarintiger1
Posts: 1,574
Registered: ‎04-29-2011

Re: OptionEye.....Aug 14th

It's strange that the USDA would not throw out the bad year on this, when they threw out last year's yield when guessing the trendline yield for this year.     I guess they are making up the rules as they go.

"Failing to prepare is preparing to fail." "Success happens when preparation meets opportunity"
Veteran Contributor
unlgrad
Posts: 92
Registered: ‎06-08-2010
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Re: OptionEye.....Aug 14th

They did not use the 2012 weight for ear corn.  Somebody is really stretching.

Veteran Contributor
Kstater85
Posts: 114
Registered: ‎06-28-2012
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Re: OptionEye.....Aug 14th

They did use the ear weight for 2012 in the average.   They got to an ear weight of .317 by using the average of the last five years.   The market has discounted the yield report from USDA because the trade doesn't believe the weather of 2013 warrants including the extreme years of 2011 and 2012 in the ear weight averages. 

Veteran Contributor
mnvtfarm
Posts: 106
Registered: ‎02-26-2013
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Re: OptionEye.....Aug 14th

[ Edited ]

Embarrass MN. had 31 degrees. I know it's a swamp way up Nort, just saying it's kinda chilly.

 

I read the USDA  had to do what they did on year weights because they had a hard time finding mature enough ears to weigh. 

Veteran Contributor
unlgrad
Posts: 92
Registered: ‎06-08-2010
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Re: OptionEye.....Aug 14th

I was informed incorrectly.  I didn't check. My fault .

Senior Contributor
hanktbd
Posts: 234
Registered: ‎01-08-2013
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Re: OptionEye.....Aug 14th

I also read that this is the first report of the year where they actually check fields and talk to farmers. The earlier reports are apparently derived from statistical probabilities. I'm guessing looking at real corn fields and talking to real farmers probaly caused them to get confused, hence the lack of bearish numbers.