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Veteran Advisor

Floor Talk August 11

Good Monday Morning to everyone! If I could, I would wave at you. Here are some Farmer Waves. How do you wave?

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At the close:

The Dec. corn futures settled 4 3/4 cents higher at $3.68.

 

Nov. soybean futures closed 11 1/4 cents lower at $10.73.

Sep. wheat futures finished 2 3/4 cents lower at $5.46.

 

Dec. soymeal futures settled $0.40 lower at $367.50. Dec. soyoil futures ended $0.66 lower at $35.21.
In the outside markets, the NYMEX Brent crude oil is $0.48 per barrel higher, the dollar is higher and the Dow Jones Industrials are 27 points higher.

 

Mike

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At mid-session:

The Dec. corn futures are trading 3/4 of a cent higher at $3.64.

 

Nov. soybean futures are trading 8 1/4 cents lower at $10.76.

Sep. wheat futures are 3 cents lower at $5.46.

 

Dec. soymeal futures are $0.90 lower at $349.70. Dec. soyoil futures are $0.54 lower at $35.33.
In the outside markets, the NYMEX Brent crude oil is $0.71 per barrel higher, the dollar is higher and the Dow Jones Industrials are 52 points higher.

 

Jack Scoville, PRICE Futures Group vice-president, says the markets are anticipating tomorrow's WASDE Report.

"The big action is in the August beans, where Decatur is now paying +230 Nov.  The market is getting squeezed and the question is how long will it last as August goes off the board this week.  Maybe another day I guess, then the interest will have to shift to Sep, which is new crop.  Corn also stronger even after some great rains over the weekend, but I think it is mostly some spec short covering before the reports tomorrow plus some talk of good demand.  The wheat is lower on spec selling tied to the news that Ukraine producers are selling corn and wheat and reports of strong offers and good quality from Russia.  Our winter wheat harvest is about over and the spring is coming fine.  I expect choppy trading until the numbers come out.  The production will be big, although USDA might not show all of it until it has more data to work with.  I think up side potential should be limited, especially as we will be trading exclusively new crop after August goes off the board.  A very low volume session so far today, and I think we stay quiet until 11 tomorrow," Scoville says.

 

Mike

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At the open:

 

The Dec. corn futures are trading 3/4 of a cent higher at $3.64.

 

Nov. soybean futures are trading 2 1/2 cents lower at $10.82.

Sep. wheat futures are 1 1/4 cents lower at $5.48.

 

Dec. soymeal futures are $0.50 higher at $351.10. Dec. soyoil futures opened $0.32 lower at $35.55.
In the outside markets, the NYMEX Brent crude oil is $0.15 per barrel lower, the dollar is higher and the Dow Jones Industrials are 46 points higher.

 

--USDA announced Monday that China bought 168,000 metric tons of soybeans to during the 2014/2015 marketing year. 

 

Mike

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At 7:22am:

Early calls: Corn is seen 1-2 cents higher, soybeans 1-2 cents lower, and wheat 3-4 cents lower.

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

Brent Crude Oil=$0.02 per barrel lower.
Dollar=Higher.

Wall Street=Seen higher, as investors hope for little involvement in Iraq conflict.

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

 

 

 

More in a minute,

 

Mike

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1 Reply
luisvieira
Senior Contributor

Re: Floor Talk August 11

I just got back from a travel to Argentina. I went to the field there and watched several lectures.  I have a few things to share with you guys about it. They expect to repeat the same soybean area. Even though the next season is right around the corner, it is unknown how big the corn area cuts will be. It is the most costful crop and as you know the price is not paying... And yet the bank will not help them! The sharp reduction of input sales gives a clue. Sales of inputs in the province of Buenos Aires, one of the major producing regions in Argentina, plummeted 30 percent in the year so far compared to 2013, according to the Chamber of Agrochemicals and Seeds Businesses of the Buenos Aires province.

 

The technical default in fact just added to the uncertainty in the economy. Nobody knows how the way out of this will wook Some farmers are paying 40% (YES, FORTY) of annual interest rate for leasing, though a lot of argentines do not use the bank... They get financed through the stock exchanges, the use of soybeans as a currency, and purchasing dollars.  I think this is something interesting. In most places, people say that they don't trust the government. But in Argentina, they even don't trust enough to leave money in the bank account because it could be ripped off by the government.

 

And can you imagine planting corn with these prices and yet taxes on exports (now at 20%)? All the farmers that I talked to said that they don't see any good perspective of growth of the farm business at least in the short-term. Some sources told me that a lot of corn and soybean growers left to Uruguay and Paraguay just to get rid of the repressive environment even if they have to go to a smaller land. It is interesting to tell the government of Argentina treats the services sector in a very different way compared to farmers and several sectors of the economy are subsidized by those dollars generated by grain and beef exporters.

 

The president of the agricultural commission from Argentina's House of Representatives, Luis Basterra, told me that eventually corn retentions could be lowered in order "to fight the monoculture of soybeans". Yet, it will be a very long and tough road until next year, when elections take place and nobody knows what policies would be implemented towards the field.

 

But I guess that would at least help corn to get to better prices in a few months. Don't you agree?

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