Floor Talk, August 15, 2019

[marketeye]

At midsession:

At midsession, the Sep. corn futures are 1/2¢ higher at $3.59 3/4. Dec. corn futures are 1/4¢ lower at $3.70.

Sep. soybean futures are 3 3/4¢ lower at $8.61 3/4. November soybean futures are 3 1/4¢ lower at $8.74.

Sep. wheat futures are 3 3/4¢ lower at $4.70.



December soymeal futures are $2.40 per short ton lower at $297.50.

 December soy oil futures are $0.11 higher at 29.66¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.70 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 112 points higher.

Mike

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At 9:00am:

In early trading, the Sep. corn futures are 2 3/4¢ higher at $3.61 3/4. Dec. corn futures are 2 1/4¢ higher at $3.72 1/4.

Sep. soybean futures are 1/4¢ lower at $8.77 3/4. November soybean futures are 1/4¢ lower at $8.91.

Sep. wheat futures are 3 3/4¢ lower at $4.70.



December soymeal futures are $0.90 per short ton lower at $299.00.

 December soy oil futures are $0.01 lower at 29.41¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.85 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 69 points higher.

Al Kluis, Kluis Advisors, says that investors are mixed on the markets.

“Typically, we see sell-offs in the market span over three days. Wednesday would have made it day three. With the sell-off in the grains and livestock--and US stock markets--investors are heading to the sidelines in a "risk off" fashion to preserve cash. Expect choppy two-sided trade. Selling in US grain prices seems to be drying up a little,” Kluis told customers in a daily note.

Kluis added, “The US corn market will trade in a sideways pattern between $3.70 and $3.90 for the next 3 to 4 weeks. When we get the next USDA Crop Production report (September), we will watch fory cuts in the US corn yield.”

[wrightcattle]

Al is thinking right. MO. 

I figure the corn yield cuts to  be in the 9 to 17 bu. per acre range for USDA data fade purposes. 

Guess how or if USDA fades back to true acres to harvest will be yet thee next fiction story from our govt. 

[WCMO]

https://www.dtnpf.com/agriculture/web/ag/crops/article/2019/08/13/day-1-record-spring-rainfall-weigh...

https://www.ocj.com/2019/08/dtn-2019-digital-yield-tour-ne-sd/

https://www.dtnpf.com/agriculture/web/ag/news/article/2019/08/14/day-2-yields-iowa-minnesota-slip

[freedom1493]

The scuttlebutt/rumor/reality now is that the reason corn markets are being pushed artificially low based on a "terrific yield" forecast is so insurance/PP pay-outs can be lower than they should really be     ..???

Another rumor is that low-appraisal farm valuations are being systematically issued this year, and when farmers won't get the PP/insurance pmts they should get because of the obviously delusional USDA report(s), the bank elites will then call in loans because you won't have the cash you actually should and you'll be classified as undersecured    ...???

Obviously, the rumor mill is working overtime and it all may be a big nothing-burger, but we'll see what we'll see.  Clock is ticking.

[WCMO · Accepted solution]

PP payouts are not affected by fall insurance prices.  And actually, lower fall crop insurance prices increase the payouts on revenue insurance policies that use the higher of spring or fall prices for the revenue guarantee; however, for most of us, the fall harvest prices are not set this time of year.

As an ex-banker, I can tell you that there is no incentive to "call" a loan that is "under-secured".  If you're delinquent in your payment, that's another matter -- deal with it head-on by talking to your banker, provide more security if can and/or necessary, make arrangements for an extended repayment plan on the delinquency, reamortize the delinquency back into your loan, borrow short-term to make the payment, sell something, get a new loan, find a new banker, etc.  And, don't put it off, do something, delinquency charges add up quickly, and while you might have some attorney's fees if something else happens, keep in mind that the bank has attorney's fees also (which you will also be liable for paying).

Rumors can be wicked.

[rickgthf]

I don't think the bankers are going to be any happier than the rest of us about this year.

  It's looking like the worst of all possible worlds, low prices and poor crops.

[roarintiger1]

Poor crops????? Just show your banker the latest USDA report.

[WCMO]

https://www.dtnpf.com/agriculture/web/ag/crops/article/2019/08/15/day-3-eastern-corn-belt-yield-brea...

[sw363535]

WCMO,   a question if you have time.

I still contend there are auxiliary issues to this year other than weather that will affect production.

1-- economic decisions --- several in sw ks chose away from corn from the very start.... expenses vs price, risk management, expense control,  4 years of falling prices and rising expenses.  Never at any time did we have the number of acres of planting intentions or actual planting that is still part of the formula

Big acres went to cotton then failed to the cold wet spring.......

2.--there were not enough funds dedicated to rebuilding after spring floods.... those were long term damages not a quick replant... to ground that got too wet....... lots of bushels lost and  PP acres have yet to be counted..... only guesses that push planting intentions way over 100m acres for corn.....a rediculous theory intended to hold up harvest acres to the mid 80's.   ------ just not enough time for this season. acres gone.  We should be seeing insurance companies complaining but since we don't, I am guessing nothing's been fixed so far.

3--  We saw early decisions made in ks away from beans or corn --- large sections of the state were too wet for a tractor from November to June.....opportunity lost not planted.

4 ---export markets were not available largely because the mississippi corridor was closed for 3-4 months.... weighing on the market.  Damages on the system yet to be fixed.  Levies that haven't been fully repaired   all too conveniently blamed on china/ US negotiations.

Were there financial issues that are hindering agriculture more than usual???

[WCMO]

SW -- agree with your points.  Not especially aware of financial issues, at least other than too much holding of old-crop corn/soybeans, not pricing enough new-crop, while optimistically thinking that trade issues would be ironed out before now and that USDA reports would be realistic (to allow for some profitable pricing after crops were planted, since whether or not crops could be planted was a serious question mark).  So cash flows might be a little tight, although local crop insurance agents and seed dealers and grain elevators seem to be doing alright.  Only guys I know with financial issues are the ones who bid up real estate, cash rents, and/or spent a lot upgrading equipment over last few years.  I'm needing to upgrade some of my equipment, yet can wait until the auctions.

Haven't been out to other areas much in past couple years, yet small-town locally, Farm Credit built a $1 million branch office building, there's a new bank with a new building (4 different banks now, newest one with 2 locations), and a 2nd Edward Jones office opened up, all within past few years.  Something must be working, area is predominately agricultural.  Maybe it's a sign, but local town hasn't had this many banks since right before the Depression.

Local area does have a lot of prevent-plant acres, especially along rivers, but in other areas also due to excess rainfall.  Maybe half of local corn probably planted during a small window in late April, then rest delayed until late May to early June.  Corn planting and replanting continued into first half of June, soybean planting continued into July.  So, other than April corn, most of the local crops that got planted are at least 2-3 weeks behind "normal".  Absent an early frost, most will make it, and general yields should be in line with averages, or better, due to continuing moisture.  Other than prevent-plant acres, crop losses primarily will be where planted crops got flooded, or late-planted or replanted corn/soybeans, or weather events yet to happen (wind, hail, wet fall, early frost, etc).

My take on the latest USDA reports is that the acres don't add up, some/much of the additional PP corn is because PP corn paid better than PP soybeans, more than normal corn will be chopped as silage due to late plant dates, and actual harvested yields might be more in line with the preliminary crop tour results than with the current USDA outlook.