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Veteran Contributor

Floor Talk April 6

At the close:

At the close, the May corn futures settled 1¢ lower at $3.88. July futures finished 1 1/4¢ lower at $3.97. May soybean futures finished 2 1/2¢ higher at $10.33 3/4.  July soybean futures ended 2 3/4¢ higher at $10.44. May wheat futures ended 7 1/2¢ higher at $4.72 1/4. May soy meal futures closed $3.10 per short ton higher at $390.10. January soy oil futures finished 0.25 lower at 31.53¢ per pound.  In the outside markets, the NYMEX crude oil market is $1.67 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 640 points lower.

 

Al Kluis, Kluis Commodities, says the market is reacting negatively to the US announcing Thursday night an additional $100 billion in tariffs against China.

 

“Well, the potential trade war between US and China seems to be heating up again.  That news spooked the US grain prices and stock markets. Traders fear an all-out war is on the horizon,” Kluis told customers in a daily note Friday.

 

Kluis adds, “If in fact China does impose import tariffs on US grains, then that will be the start of a deep landslide for corn, soybeans and wheat prices.”


Mike North, President Commodity Risk Management Group, says that one can hear lingering in the background an old expression from our childhood....."Oh Yeah, Watch This!" 

 

“This week, US and Chinese Officials have taken turns using that line as tariffs were proposed or threatened by each country.  The whipsaw effect of these announcements have given traders heartburn as prices dropped precipitously only to recover in the wake of future hope that nothing would materialize or that impacts would be small,” North says. 

 

North adds, “Nonetheless, it has distracted the ongoing conversation about weather which threatens to further slow spring planting and tightening balance sheets as lower acreage couples with the possibility of lower yields.  Heap on top of that the incredibly long fund position and we have the making for some extreme volatility.  And that is the best way to define the week.”

 

 

At mid-session:

At mid-session, the May corn futures are 1 3/4¢ lower at $3.87. July futures are 2¢ lower at $3.96. May soybean futures are 1/2¢ higher at $10.31.  July soybean futures are 1/2¢ higher at $10.42. May wheat futures are 2 3/4¢ higher at $4.67. May soy meal futures are $1.60 per short ton higher at $385.20. January soy oil futures are 0.28 lower at 31.50¢ per pound.  In the outside markets, the NYMEX crude oil market is $1.11 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 421 points lower.

 

Mike

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At 10:25am:

If you missed it, the USDA announced numerous fresh corn and soybean exports Friday.

 

Private exporters reported to the U.S. Department of Agriculture the following activity:

-- Export sales of 100,000 metric tons of corn for delivery to Egypt during the 2017/2018 marketing year; and

 

-- Export sales of 130,632 metric tons of soybeans for delivery to Mexico.  Of the total 65,316 metric tons is for delivery during the 2017/2018 marketing year and 65,316 metric tons is for delivery during the 2018/2019 marketing year; and 

 

-- Export sales of 20,000 metric tons of soybean oil for delivery to unknown destinations during the 2017/2018 marketing year; and

 

-- Export sales of 458,000 metric tons of soybeans for delivery to unknown destinations.  Of the total 327,000 metric tons is for delivery during the 2017/2018 marketing year and 131,000 metric tons is for delivery during the 2018/2019 marketing year. 

 

The marketing year for corn and soybeans began Sept. 1; soybean oil began Oct. 1.

 

Perspective: China is expected to import 100 mmt of soybeans, this year. It will get 69 mmt. from Brazil. Where will the rest come from? The remaining 31 mmt. most likely will have to come from the good ole U.S. of A. And, right now, U.S. soybeans are 88¢ cheaper than Brazil. This perspective was presented, this morning, by Jim Bower, Bower Trading Inc., in a daily note to customers.

 

What say you?

 

Mike

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At 9:00am:

In early trading, the May corn futures are 2¢ lower at $3.87. July futures are 1 3/4¢ lower at $3.96. May soybean futures are 8 1/4¢ lower at $10.22.  July soybean futures are 8 3/4¢ lower at $10.33. May wheat futures are 1 1/2¢ higher at $4.66. May soy meal futures are $0.90 per short ton higher at $384.50. January soy oil futures are 0.23 lower at 31.55¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.08 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 101 points lower.

 

 

Mike

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Soybeans and grains were lower overnight after the president told the US Trade Representative to find another $100 billion in Chinese goods on which it could impose tariffs. Beans lost 17 cents, corn was down about a nickel and wheat declined 4-6 cents overnight. China responded to the threats of more levies on its goods by saying it's not afraid of a trade war and that it will defend itself "at any cost." In weather news, thunderstorm warnings are in effect for much of Oklahoma as rain, hail and strong winds are forecast. A freeze warning is also in effect for much of the eastern Midwest as temperatures are projected to fall into the mid-20s tonight. Further north, a winter storm warning is in effect for the western half of Nebraska and parts of South Dakota this morning. See all the details in today's 3 Big Things

 

Brent Crude Oil = up 0.8%.

West Texas Intermediate = down 0.9%.

Dollar = up 0.1%

Wall Street = U.S. stock markets lower pre-bell.

World Markets = Global stocks lower overnight. 

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2 Replies
Honored Advisor

Re: Floor Talk April 6

Just woke up to some of the odd news in this information..........

 

It does say that egypt bought 100,000 metric tons of corn from the US.....

As I remember it was just three or four years ago when egypt was buying at the lofty rate of 2.6 mmt of corn per year (2014 as i remember)

This year we are on our way to 8.6 mmt...    sales to a country that normally buys wheat in feeding quality.

It is record stuff going on in the export numbers ... yet the agriculture press continues to print as directed by the "industry"....... 

 

No better example than this week when our government is bargaining for terms and the industry wants it to be a doomsday event.... we nearly ignore what is actually happening in the markets to report what we are told "might" happen in the markets some day.

Senior Contributor

Re: Floor Talk April 6

They only tell you what they want you to know.

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