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Mike
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At the close:
The May corn futures contract closed 3/4 of a cent higher at $5.03. The Dec. corn futures closed 1/4 of acent lower at $5.03. The May soybean futures contract finished 25 cents higher at $15.01. The Nov. soybean futures settled 9 cents higher at $12.29. May wheat futures closed 23 cents higher at $7.01 per bushel. The May soymeal futures contract is trading $8.30 per short ton higher at $487.40. The May soyoil futures settled $0.57 higher at $42.83.
In the outside markets, the Brent crude oil is $0.43 per barrel lower, the dollar is higher and the Dow Jones Industrials are 44 points higher.
Thomas Barry, wheat options floor trader, offers up these comments about the May options explosivesness, despite a rapidly decaying contract.
"The rally that took the wheat from the depths of the mid $5's to almost $7.30 and then back to the mid $6's seemed to be handing traders an oh so familiar scenario in the wake of the last two reports. The thought here was that the excitement was over for a while, and that any rich front month inventories (i.e. May and June) on the long side would be in for some punishment, which is exactly what was happening last Tuesday and Wednesday as May implied sand to a gut-wrenching 21 3/4%. People who have traded this market have seen that set-up play lout many timers over the years. May, with so little time left, looked like someone had just stuck that fork deep into it with little concern for any subsequent surprises. The put slope that had been bid with such deliberation and the call slope that went flat like no other May slope in recent memory were both returning to a more normal relationship. And the idea that this market was due for an extended lull was fairly wide spread and accepted by an all too expectant local population. But last Thursday saw things start to heat up once again, and Sunday night's developments on the international front injected fresh premium into a front end that showed stunning resiliency when most expected it to roll over and fade into history. Even after the renewed interest on Monday there was still plenty of well capitalized and intelligent sources willing to step in and sell the freshly inflated implied levels....sort of like one extra bonus before the inevitable. But then we get Tuesday's mid-session rally that lifted an unchanged and rather sleepy trade and took the wheat 24 cents highers and added a quick 2 1/2% to the front month implied. There was size selling in May 675 puts v. $6.78 at 10 1/4 (2000x) in the early going, and buy the end of the session Tuesday, we had spec options guys paying 12 1/2 and 13 for those same put vs. those same levels in size. The front month May should be dealt with with extreme caution or avoided if you don't have irons in the fire already. July implied was up a solid 1% on Tuesday with sellers a bit more on the tentative side there. Wheat finished strong, and seems quite capable of daring people to sell it because it's simply too rich and then proving them wrong quickly. The notion that we are in fact too expensive given less than quantified reasons for being where we are once again (above $7.00 with front month above 30%) is still a real possibility. But try telling that to those who stuck to their guns when it looked like the whole thing was winding to a gentle and stagnant landing last Wednesday. Those people are now craning their necks with red faces as we go home on the highs with no indication one way or the other.
A wall of worry? definitely...if those boots start hitting the ground running," Barry says.
Mike
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At mid-session:
The May corn futures contract is trading 3 1/2 cents lower at $4.99. The Dec. corn futures are trading 1 3/4 cents lower at $5.01. The May soybean futures contract is 18 cents higher at $14.94. The Nov. soybean futures are trading 6 cents higher at $12.26. May wheat futures are 4 1/2 cents higher at $6.83 per bushel. The May soymeal futures contract is trading $5.90 per short ton higher at $485.00. The May soyoil futures are trading $0.60 higher at $42.86.
In the outside markets, the Brent crude oil is $0.15 per barrel lower, the dollar is higher and the Dow Jones Industrials are 82 points lower.
Matt Connelly, Futures International floor trader, says the soybean market is being driven by the cash basis being firmer. "Also, the NOPA March stocks report coming out at 2.023 billion pounds, vs. some in the trade looking for 1.960 billion, could provide some fireworks, also. Big picture, we have an imbedded short in old crop beans, the export arm to all these vessels looking for a home. Commercials not letting China cancel or roll these beans to new crop, export arm to China, who we think is Marubeni, is long cash SHORT futures getting smoked. When he is out then old crop beans will break," he says.
NOPA Report Released Tuesday:
--March U.S. soybean crush set at 153.84 million bushels vs. 141.6 million a month ago, and the largest since 2001.
--March U.S. soyoil stocks recorded at 2.023 billion pounds vs. 1.893 billion a month ago.
Mike
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At the open:
The May corn futures contract is trading 3 cents lower at $4.99. The Dec. corn futures are trading 2 cents lower at $5.01. The May soybean futures contract is 5 cents higher at $14.82. The Nov. soybean futures are trading 2 cents lower at $12.17. May wheat futures are 2 cents lower at $6.76 per bushel. The May soymeal futures contract is trading $4.20 per short ton higher at $483.30. The May soyoil futures are trading $0.13 lower at $42.13.
In the outside markets, the Brent crude oil is $0.92 per barrel lower, the dollar is higher and the Dow Jones Industrials are 25 points higher.
Mike
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At 7:55am:
Early calls: Corn is seen 1-2 cents lower, soybeans 5-7 cents higher, and wheat 1-2 cents lower.
Trackers:
Overnight grain, soybean markets=Trading mixed.
Brent Crude Oil=$0.92 per barrel lower.
Dollar=Higher.
Wall Street=Seen lower.
World Markets=Europe stocks were mixed, Asia/Pacific stocks mostly higher.
More in a minute,
Mike
