B-Team Floor Talk for Thursday, 12.22

[Jeff_a_Caldwell]

Day 4 of the rally's in the books! At the close, March corn was 1 cent higher at $6.17 1/2 per bushel, while March wheat was 4 3/4 higher at $6.21 3/4 and January beans were 8 1/2 higher at $11.62 1/4.

Looked like corn took a quick dip toward the end of the session after surging as much as 8 cents higher earlier in the day. Profit-taking? 

La Nina's the phrase of the day, it sounds like. Some major concerns about this situation extending and baking the S.A. crops. That looks to be the big story for the next few days, anyway.

Hey, let's make it a full week tomorrow! Thanks for hanging with me today. See you back here tomorrow! Have a good one and stay safe out there!

Jeff

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We're back moving higher again! Like Lee Corso says -- Not so fast, my friend! The slide from earlier today was flipped, with higher-than-expected export sales reports this morning adding to the upward momentum the South American weather situation's lending all pits. 

March corn is trading 6 1/4 cents higher at $6.22 3/4 per bushel, while January beans are 11 cents higher at $11.64 3/4 and March wheat is 6 3/4 cents higher at $6.23 3/4.

Here are those export sales numbers for corn and beans. 

Now, we're officially at one-month-high prices. 

More in a few!

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Just found this info on further La Nina prospects for the next few monts, from CWG, Commodity Weather Group, in Chicago:

Our updated outlook for the balance of the summer has continued to trend drier for Argentina, based on similarities between water temperatures in the South Atlantic and current weather patterns in ‘99/’00 and ‘08/’09 (both La Niña years).

Given the current moisture deficits, this will increase the risk of corn/soybean stress in 2/3 of the belt. However, much of the early-planted corn will have already finished pollinating by January, and late-planted corn as well as soybeans will see moisture needs peak starting in February. This could help to limit yield impacts from the January pattern.

The outlook does not become particularly wet in February and March, but there does appear to be a better shot at rainfall than January. The forecast after January is based mostly on the ‘99/’00 analog and trends in other La Niña years that had drier December/January patterns that focused on Argentina and far southern Brazil. This could somewhat benefit crop development, with northeastern Buenos Aires, Entre Rios, eastern Santa Fe, and southern Cordoba (at least 1/4 of the belt) at most risk for stress in February/March.

Heat does not ap-pear likely to be sustained, but there is a better chance for rounds of warmth (especially in eastern parts of the belt) through the balance of the summer that could occasionally add to stress in the drier areas. In Brazil, Rio Grande do Sul appears most likely to remain on the edge of rains through much of the balance of the summer. While the pattern is unlikely to be completely dry, the lack of better moisture supplies should allow for the southern 15 to 20% of the belt to see some decline in corn/soybean yields. January dryness is also expected still in much of the Mato Grossos.

Given expected late December rainfall, stress to soybeans may be tempered, but minor losses are possible for southern Mato Grosso and northern Mato Grosso do Sul (additional 15% of Brazil soybeans) due to more limited long-term soil mois-ture reserves. Dryness otherwise tends to shift around in northern Brazil for the balance of the summer, and central Brazil sees good rainfall. This would offer good prospects for soybean development in central Brazil, and second-crop corn prospects also appear favorable. Temperatures may occasionally heat up in Rio Grande do Sul, but much of Brazil should average fairly close to normal. Moisture should also be favorable for most coffee, cotton, citrus, and sugarcane areas.

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Don't give up on me now! We're hanging on to slight gains, with corn trading less than a penny higher: March corn is trading 1/2 cent higher at $6.17 per bushel, while March wheat is 1 1/2 higher at $6.18 1/2 and January beans are 5 1/4 higher at $11.59.

Sounds like we could just see things gradually slow down to a crawl as we get closer to Christmas, both in terms of trading volume and price gains. Wouldn't be surprised if we end up slightly lower for the day, at least for corn. 

But, check this out: Just saw a pretty ominous outlook for La Nina -- could come back even stronger in the next year, meaning more heat and dryness both down in South America and a repeat of the drought conditions in parts of the Corn Belt, possibly worse than this last summer. Think that'll end up happening? 

• Here's that La Nina story 

More in a few...

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Here's a bit from a wire story just up:

US grain and soybeans mostly higher overnight, fueled by ongoing concern about weather issues for crops in parts of South American growing areas. Short covering and technical buying continues to buoy prices, with more optimistic outlooks for the global economy easing investor fears across asset classes, analysts say. Traders are less willing to step in front of the price theme, as many are content to stay on the sidelines in thinly traded holiday markets. CBOT March corn was up 3/4c at $6.17 1/2/bushel, March soy was up 2 1/4c at $11.65 1/2, and March wheat was unchanged at $6.17.

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Is the steam running out of the rally of the last few days? Sounds like we'll see a slightly higher to unchanged opening this morning after 3 days of higher prices. The Brazil weather situation is still in the background, and it sounds like that will, in the least, put a floor under these grains, and at most, keep sending them higher. But, there's room for some profit-taking now, and some say that could happen today and tomorrow, along with some position-squaring ahead of the long Christmas holiday weekend.

Early calls for the grains are corn 1-3 cents higher, soybeans 2-4 higher and wheat unchanged to 2 higher. Overnight trading found March corn trading 3/4 cent higher at $6.17 1/4 per bushel, while January beans were 2 1/2 higher at $11.56 1/4 and March wheat was unchanged at $6.17.

So, do you still have faith in the rally on this South American weather story, or will profit-taking knock things lower today? 

More from the B-Team in a few...

Jeff

[jrsiajdranch]

JC I see you keep getting your posts up later and later, Aren't you getting enough sleep? LOL Don't worry some day in about 16 years they will be out with some friend and you will be getting no sleep again!  So this is just practice for the real thing.

BTW it is real funny how the euro can just hover at 130 and the dollar at 80. Just wait till we get over the holiday cheer.  Then it can turn dry as a bone in Brazil and every day the markets will go down.

To take liberties with bill clintons campaign slogan "it's the dollar stupid!" . 

(OF course I am not calling you, Jeff, stupid)

Besides at these low volumes does it really mean this was a sustainable rally?

[Jeff_a_Caldwell]

Yep, JR. It's amazing how hard a 4-year-old can kick when she's sleeping with her feet aimed at her dad's head! I never thought I'd wake up in a bed with 3 women in it! Ha! I'm getting my early indoctrination into the world of living with a house full of women! 

Hey, just saw one analyst recommending to sell beans and corn at current prices. Anybody buying this strategy, or do you see more room for upside yet? 

[mspencerfarms]

Jan. beans should find resistance at the 11.63 on the charts plus option expiration is tomorrow.   Uhmmmm????   I bet the market retracts into tomorrow and it could be a place to lift hedges or buy in preparation of a rally starting next tues.

[agmr]

Nearly two-thirds of the grain crops of Paraná suffer from the beginning of the month with a decline in rainfall. Scarce and irregular rainfall is considered insufficient in the regions Southwest, West, Northwest, Midwest, North . Only in the Campos Gerais and in the South the problem is less severe. There are farms for 30 days without rain in the cities of the Southwest and West.

Estimates are that 62% of corn and soybeans 44% - at flowering and fruiting - are susceptible to weather losses. Drought is considered a manifestation of La Niña.

If it does not rain within a week, we will have a heavy loss in the crop, said a farmer in Maringá (Northwest). The sandy soil of the region is dry in a few days, which aggravates the situation. The recovery potential of the plants will be tested starting this week. The forecast is that the weather to be cloudy with possible rain showers in dry regions.

Maringá is among the regions hardest hit. In these regions, crops received 10% of the humidity expected in December.Very small amounts of rain do not retrieve soil moisture.

The manager of the Department of Agronomy cooperative C. Vale, says that the poor distribution of rains punish the region in Palotina (West). We have crops for more than 30 days without rain, and other, very close, which received 30 mm in the last days.

The last harvest in Paraná that faced a decline in agricultural production because of La Niña was in 2005/06. Losses were 4.13 million tons of grain (58% soy) . Soybean production had a reduction of 20%, and 18% on corn . The La Niña of 2005/06 was considered strong. The phenomenon was repeated last season, with moderate intensity, without causing losses in the summer, which was considered an exception. This time, the intensity is also moderate and forecasts are scarce and irregular rainfall to the south in December and January

[agmr]

Rainfall in Argentina misses important Crop areas

Data received from Meteorological Stations – Source : Rosario stock Exchange

The rains that occurred in the last 24 hours passed by in many agricultural regions of the core of the Pampas region that are more than needed of water.

In Pergamino rained 5.2 mm (the first rain recorded so far in December), while in the area of Rojas was only 2.8 mm, 4.6 mm in Chacabuco and 2.4mm in Junín .

Other areas of Buenos Aires were more lucky: in Lincoln rained 16 mm, 19 mm in Baradero (so far this month, the accumulated is 32 mm) and 24 mm in General Pinto. But in General Villegas virtually nothing  and so far  the added rainfall for December is 8 mm.

As far south of Santa Fe, Maria Teresa received 3.2 mm; Maggiolo 9 mm (25 mm accumulated so far in December), Rufino 10 mm  , 15 mm Bigand (accumulates 20 mm); Classon 16 mm (sum 22) and Santa Teresa about 32 mm.

In the southeast of Cordova the most favored were Noetinger with 12 mm (18 mm so far in December) and Monte Buey with nearly 11 mm (sum also 18 mm), while only 5.2 mm were received in Canals (16 mm in the month) and 3.6 mm in  Bengolea (17 mm accumulated).

[teaspoon73]

  agmr  thank you for the update from Parana. With your corn at the pollination stage, and beans beginning to flower we realize how  a good rain and moderate temps would help. Looks like your next chance is over the weekend, Hope your farm gets rain. It looks like your high temps are in the 36 -38 degrees Celcious range, how is the corn and beans looking? Any curling or firing? 

   With a La Nina one never knows how long it will last. It affects different parts of the world , some to wet others to dry.

   agmr keep us informed with your weather situation. Thank You

[agmr]

Will do.

Ref corn and beans , both yes . We are in a very delicate situation in those dry areas.

[roarintiger1]

Agmr, are the grain markets there adjusting to these dry developments?

[agmr]

I guess you are going to start to see private and official crop figures from our region being cut pretty soon.

Being on the conservative side , you know that beans are very resilient to hot - dry weather (eventhough we know for sure a big chunck of them are being "toasted" under plus 100s degrees- its 110 today in a pretty wide area -   and if you get 1 inch of rain under plus 100s  is worst than getting nothing , you need at least 2 inches ) , but as I mentioned before , forget abt record SA crop.