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Veteran Advisor

Floor Talk August 12, 2020 (Report Day)

At the close:

At the close, the Sept. corn futures finished 3¢ higher at $3.14 1/2. Dec. corn futures finished 3 1/4¢ higher at $3.27 1/4.

Sept. soybean futures settled 10¢ higher at $8.80 1/2. November soybean futures closed 9 1/2¢ higher at $8.83 1/2.

Sep. wheat futures ended 3 3/4¢ lower at $4.91 3/4.

Sep. soymeal futures settled $0.10 per short ton higher at $284.20.

 Sept. soy oil futures closed $0.94 cent higher at 31.56¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.11 per barrel higher at $42.72. The U.S. dollar is lower, and the Dow Jones Industrials are 288 points higher.

Mike

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At 11:22am:

 

See full USDA Report story.

 

Trade Reaction

--Jack Scoville, PRICE Futures Group, says that the report was negative fo prices.

“The USDA estimated the crops every bit as high as had been forecast by the trade. Also, in line with most trade expectations were ending stocks levels and South American production estimates. So, we got a little relief bounce after the release of the report, but the overall bearish sentiment and numbers are keeping prices generally weak. The trade will now expect the production estimates to increase in coming reports. So, prices could stay generally weak," Scoville says.

 

--Sal Gilbertie, Teucrium Trading, says that today’s USDA report is being ignored.

“The USDA has a habit of overestimating yields in the August report, and with Monday’s intense storm damage still being assessed the blockbuster yields in today’s report are being largely ignored. Most of the trade will wait to see what weather damage actually occurred, and all eyes will be on Chinese buying, which has been robust the past several weeks. What would have been a bearish report has been overwhelmed by extraneous factors, and the markets are holding up well post-report,” Gilbertie says.

 

--Jason Roose, U.S. Commodities, says that this August report is different than last year's.

“The difference is that the expectations for an increase in yield, production and carry out for corn and soybeans eliminated any shock this year, with increased yields for corn of 3.3 bushels and a 3.5 bushel soybean yield. Plus, production increases in both corn and soybeans left very little bullish surprises on this report. But, key to the numbers released today is how much of the premium is dialed in. With 2019 world ending stocks lower than expected for corn and soybeans, combined with the weaker dollar, that scenario could offset larger ending stocks," Roose says.

 

--Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that the report's data is not causing much volatility in the markets.

“Despite higher ending stocks projected for 2020/21 corn and soybeans both markets are trading higher. The U.S. corn crop is expected to increase to 15.3 billion bushels with an increase in yield to 181.8 bpa. A portion of the production increase was offset by larger projected feed usage and exports; however, ending stocks are still increased to 2.8 billion bushels.

O'Connell added, "With lower prices and weakness in the dollar U.S., corn will likely continue to remain competitively priced. Soybean yields were increased to 53.3 bpa, pushing ending stocks to 610 million bushels. U.S. crush and exports were revised higher.
Despite the bearish numbers the market is moving higher, indicating that the numbers published were within the expectations of the trade,” O’Connell says.

 

Mike

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At 11:21am:

 

At midsession, the Sept. corn futures are 1/2¢ lower at $3.11. Dec. corn futures are 1/4¢ lower at $3.23 1/4.

Sept. soybean futures are 4¢ lower at $8.66 1/2. November soybean futures are 5¢ lower at $8.68 1/2.

Sep. wheat futures are 3/4¢ higher at $4.95 3/4.


Sep. soymeal futures are $1.50 per short ton lower at $282.60.

 Sept. soy oil futures are $0.26 cent higher at 30.88¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.73 per barrel higher at $42.34. The U.S. dollar is lower, and the Dow Jones Industrials are 251 points higher.

Mike

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At 11am:

USDA says:

 

Corn yield 181.3

 

Soybeans 53.3

 

BIG numbers

 

Market falls

 

Mike

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At 10:15am:

In early trading, the Sept. corn futures are 1/2¢ lower at $3.11. Dec. corn futures are 1/4¢ lower at $3.23 1/4.

Sept. soybean futures are 1 1/2¢ higher at $8.72. November soybean futures are 1 1/4¢ higher at $8.74.

Sep. wheat futures are 2 3/4¢ lower at $4.92.

Sep. soymeal futures are $0.20 per short ton lower at $283.90.

 Sept. soy oil futures are $0.30 cent higher at 30.62¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.69 per barrel higher at $42.30. The U.S. dollar is lower, and the Dow Jones Industrials are 261 points higher.

Al Kluis, Kluis Advisors, says that investors eye today's USDA Report.

"The trade has built in some very large yields and ending stocks numbers ahead of the key USDA reports that are out at 11 am today. I think we may get a negative report, and that sets up a bad-news-at-the-bottom type of report. The most important time to watch the grain markets is between noon and the 1:15 close," Kluis told customers in a daily note.

He added, "Watch the FSA report on prevent plant acreage, which will be released late this afternoon. Will we learn how U.S. farmers planted 7.4 million less acres in the 12 major crops in 2020 than we did in 2018."


On Wednesday, private exporters reported to the USDA the following activity:

--Export sales of 258,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year; and

--Export sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year;

The marketing year for soybeans began Sept. 1.

 

Mike

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5 Replies
Highlighted
Honored Advisor

Re: Floor Talk August 12, 2020 (Report Day)

Who says those are "big" numbers, mostly in line with expectations, and then take off a few hundred million bu in Iowa and it is hardly a bearish report, and then look, hot dry forecast for bean pod fill up north and look....corn up a penny.  :-)

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Veteran Advisor

Re: Floor Talk August 12, 2020 (Report Day)

As you can see with the market's reaction, these numbers were baked in.

 

Mike

 

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Advisor

Re: Floor Talk August 12, 2020 (Report Day)

Good thing it’s not illegal or regulated to bake numbers into a cash market when they haven’t even been printed yet.  It’s only peoples livelihood they’re playing with.  Why would that matter? So, your saying if the yield report even went down 1bu.  Should/would have been limit up? Unbelievable 

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Veteran Advisor

Crops

Sometimes get larger... 

Think 16 to 16.4b corn at $4.30 for 20 and 21.

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Senior Contributor

Re: Crops

What is your reasoning for those figures?

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