Floor Talk April 8

[marketeye]

After the close:

USDA Crop Progress Report:

Winter Wheat is rated 29% very poor-poor, 36% fair, and 35% good/excellent. Here is the list of corn planting progress statewide:

Mississippi= 41% planted

Missouri= 2%

Arkansas= 25%

Texas= 54%

Tennessee= 2%

Mike

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At the close:

The May corn futures contract closed 7 3/4 cents higher at $5.07. The Dec. corn futures settled 7 1/2 cents higher at $5.13. The May soybean futures contract ended 18 cents higher at $14.82. The Nov. soybean futures closed 9 cents higher at $12.17. May wheat futures finished 4 3/4 cents higher at $6.81per bushel. The May soymeal futures contract finished $3.80 per short ton higher at $478.10. The May soyoil futures closed $0.68 higher at $42.11.
In the outside markets, the Brent crude oil is $1.75 per barrel higher, the dollar is lower and the Dow Jones Industrials are 74 points lower.

Mike

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At mid-session:

The May corn futures contract is trading 5 1/4 cents higher at $5.04. The Dec. corn futures are trading 1 1/2 cent higher at $5.07. The May soybean futures contract is 9 1/4 cents higher at $14.73. The Nov. soybean futures are 6 1/4 cents higher at $12.14. May wheat futures are 1 1/2 cents lower at $6.74per bushel. The May soymeal futures contract is trading $4.10 per short ton higher at $478.40. The May soyoil futures are trading $0.13 higher at $41.56.
In the outside markets, the Brent crude oil is $0.82 per barrel higher, the dollar is lower and the Dow Jones Industrials are 33 points higher.

Jack Scoville, PRICE Futures Group vice-president, says the markets are supported by buying today in soybeans.
"This is related to ideas that USDA will need to cut ending stocks in its April USDA Supply/Demand report tomorrow and worries about extreme demand.  I am not sure they will get this, but the market is looking for it," Scoville says.  
He adds, "I think USDA leaves things unchanged as the soybean imports are going to come in at a decent clip now to New Orleans and Wilmington, NC."  
For corn,  the trade is as much about weather as anything, he says.
"It's going to cool down again, next week, and the weather not allowing for much dry down.  But crop progress is really pretty good in the South. So, I think the buyers are a bit early," Scoville says.
Plus, China will allow imports of Brazilian corn now, not seen as positive for U.S. corn demand.  
"Both corn and soybean markets are supported by the el nino talk going around too. The weather pattern, if realized, should not hurt U.S. production potential per se, but it will affect production around the world," Scoville says.  
Wheat is rallying on the state reports and the el nino talk as well. NASS's state crop conditions report, released Monday, showed a little more deterioration.  
"My speculative customers are buying, my farmers and industry quiet right now," he says.

Mike

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At 10:30am:

The May corn futures contract is trading 3 1/4 cents higher at $5.02. The Dec. corn futures are trading 1 cent higher at $5.06. The May soybean futures contract is 7 1/4 cents higher at $14.71. The Nov. soybean futures are 3 cents higher at $12.11. May wheat futures are 5 3/4 cents lower at $6.70 per bushel. The May soymeal futures contract is trading $3.90 per short ton higher at $478.20. The May soyoil futures are trading $0.16 lower at $41.27.
In the outside markets, the Brent crude oil is $0.54 per barrel higher, the dollar is lower and the Dow Jones Industrials are 44 points higher.

Mike

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At the open:

The May corn futures contract is trading 1 cent lower at $4.97. The Dec. corn futures are trading 2 cents lower at $5.02 3/4. The May soybean futures contract is 4 cents higher at $14.68. The Nov. soybean futures are trading 1/4 of a cent lower at $12.08. May wheat futures are 1/4 of a cent higher at $6.76 per bushel. The May soymeal futures contract is trading $3.10 per short ton higher at $477.30. The May soyoil futures are trading $0.21 lower at $41.22.
In the outside markets, the Brent crude oil is $0.52 per barrel higher, the dollar is lower and the Dow Jones Industrials are 36 points lower.

Mike

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At 7:40am:

Early calls: Corn is seen 2-4 cents lower, soybeans 2-4 cents higher, and wheat 2-4 cents lower.

Trackers:
Overnight grain, soybean markets=Trading mostly lower.

Brent Crude Oil=$0.58 per barrel higher.
Dollar=Lower.

Wall Street=Seen lower.

World Markets=Asia/Pacific stocks were mostly lower, Europe stocks were lower.

More in a minute,

Mike

[crophugger]

What were the crop condition ratings? TIA

[NDf]

Crophugger they were postponed for a day I think they will be out this afternoon.

[Canuck5]

Mike....any word from the floor as to what happened to wheat after trade re-opened?  Why the dime drop?

[Palouser]

I was reading this morning that traders aren't convinced the Southern Plains are that bad off, that WHEN it rains it will recover.

Well ..... OK. You read it here.

[Hobbyfarmer]

Adjusters are putting the sw section of the hww belt at 2 bu or less this time of year, the recovery will not happen till next year. Any plant with any green life left in it is counted as a viable bin busting yielding plant. They aren't finding much alive out there.

[marketeye]

The market is not concerned with the poor rating of wheat that showed up in the weekly state NASS reports.

Pct good
 
                               2014            2013
 
Kansas                    29                 31
Okla                        15                 28
Tex                          13                 17
Colo                        35                 14
Neb                         56                 11
Ill                             47                 72

Separately, Helen Pound, KCG Futures Senior Futures Market Specialist, says the current prices are assumed to have also factored in sizable risk due to late spring planting and HRW quality deterioration. "Current weather forecasts suggest planting delays and a lack of a soaking rain in the US southwest will continue.
A chunk of “Black Sea” risk has come out of wheat prices, but the Ukraine is back in the headlines.  Russia would like to see the Ukraine govern as a federation of somewhat autonomous states, while the Ukraine and the West would like to see a centralized government.  To add to the tensions, various pro-Russia groups have taken over or been thrown out of public buildings in a few towns.  Corn and wheat shipments from the region continue (see below).
The Goldman Roll has begun.  Various Funds have a specific protocol for rolling positions out of expiring trading months.  In most cases this means selling nearby Long positions and buying a new Long position in a deferred month.  Current May open interest is quite large and traders need to pick up the pace of liquidation," she says.

[giolucas]

Mike,

Was on the floor Friday and I was told that they are thinking on having contracts with no months.  All you do is trade the type of commodity.  No months.  That is in the works.

[marketeye]

giolucas,

Tell us more. Why would they do that? Who would benefit? And it seems that would kill the options market? Isn't time decay a big part of a put and call play?

But, do tell. What else did you hear about this?

Thanks,

Mike

[giolucas]

Mike,

I guess it is still in the works with a smaller contract that will not have month expirations.  Since most traders do not take delivery and just looking for fluctuations in price they benefit the most with not having to jump from month to month in  a particular commodity.  I will try to get more info later.