Floor Talk August 15

[marketeye]

At the close:

The Dec. corn futures settled 3 1/2 cents higher at $3.77.

Nov. soybean futures closed 4 cents lower at $10.52.

Sep. wheat futures finished 14 cents higher at $5.51.

Dec. soymeal futures closed $2.40 higher at $353.50. Dec. soyoil futures finished $0.65 lower at $33.21.
In the outside markets, the NYMEX Brent crude oil is $0.44 per barrel lower, the dollar is lower and the Dow Jones Industrials are 44 points lower.

Mike

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At mid-day:

The Dec. corn futures are trading 2 1/4 cents higher at $3.75.

Nov. soybean futures are trading 4 cents lower at $10.52.

Sep. wheat futures are 12 1/4 cents higher at $5.49.

Dec. soymeal futures are $1.90 higher at $353.00. Dec. soyoil futures are $0.57 lower at $33.29.
In the outside markets, the NYMEX Brent crude oil is $1.22 per barrel higher, the dollar is lower and the Dow Jones Industrials are 104 points lower.

Alan Brugler, President of Brugler Marketing & Management LLC, says the Dec corn closed above $3.70 on Thursday, which is the 18-day moving average.

"All that suggests is a rally to the upper Bollinger Band. Since the BB's are in a pinch formation, the upper BB is only at $3.77 3/4. I do like that Dec closed the chart gap from July 18-21 at $3.78 overnight. That eliminates a measuring gap to the downside, and offers potential that it was an exhaustion gap (i.e last gasp of a downtrend).  A close above $3.81 would be more significant, as that is a downtrend line from the May and July highs.
Brugler adds, "The funds are still net long corn, waiting to see if there is freeze damage that tightens up the ending stocks.  They will start adding longs against commercial shorts, which they only get when there is farmer selling.  Translation:  a small rally that attracts farmer selling will likely turn into a larger rally.  The question is whether farmers will sell now, or are holding out for $4 minimum."

Mike

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At 10:45am:

FSA August 2014 Acreage Estimates Released Friday:

Corn=1.5 million acres unplanted.

Soybeans= 827,131 prevented planting acres.

Wheat=  1.36 million prevented planting acres.

Trade analysis of today's numbers. What do they mean?

"It's believed that the FSA preliminary planting data is signaling a delay in the amount of acreage lost, when compared to USDA planted acres. It's felt that the data will converge, ultimately, in the January report. (Also, the FSA data could be incorporated into USDA data in the October report)," according to a well respected marketing firm. 
In the meantime, the trade is expected to be “suspicious” of corn plantings, the market expert says. "At least until the October report (on top of the normal risk of both planted and harvested acres changing monthly going forward as surveys are done)."
 
There are some suggesting, he says, of the potential of a fall of more than 2.5 million acres, eventually in plantings. Last year, final plantings were 1.9 million lower from June to Final and harvested corn acres down 1.4 mln.
 
"At face value then, an imagined 2 – 2.5 mln acre decline in plantings and the USDA Aug 167.4 yield, would leave 2014/15 ending stocks at 1.7 bln with a carryout to use ratio of 12.5 pct. A possible 170 eventual yield could leave ending stocks at 2.0 bln and a carryout to use ratio of .15," he says.
 
Therefore, if the suspicions of more acreage loss is realized, and the supply/demand ratios are adjusted, perhaps corn lows are in. Of course, this is said with the idea that U.S. corn yield does not reach 172.

Bottomline: These early FSA acreage estimates and the s&d data does make the trade scratch its head a bit, knowing that all along the market has been assuming much larger carryouts and lower fall prices, according to the market expert.

Marketeye says: "I know you want to know who is saying this. I can't give that to you. Trust me, he is highly respected. I'm summarizing what he is saying, regarding today's new numbers.

What do you think?

Mike

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At 8:45am:

The Dec. corn futures are trading 3 1/4 cents higher at $3.76.

Nov. soybean futures are trading 2 1/2 cents higher at $10.58.

Sep. wheat futures are 3/4 of a cent higher at $5.38.

Dec. soymeal futures are $3.00 higher at $354.10. Dec. soyoil futures opened $0.17 lower at $33.69.
In the outside markets, the NYMEX Brent crude oil is $0.01 per barrel higher, the dollar is lower and the Dow Jones Industrials are 41 points higher.

Mike

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At 7:35am:

Early calls: Corn is seen 3-5 cents higher, soybeans 7-9 cents higher, and wheat 4-6 cents higher.

Trackers:
Overnight grain, soybean markets=Trading higher.

Brent Crude Oil=$0.01 per barrel higher.
Dollar=Lower.

Wall Street=Seen higher, with economic data eyed.

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

More in a minute,

Mike

[roarintiger1]

Interesing planted acres numbers released by the FSA................

[Canuck5]

OK Mike.  I'm waiting for "more in a minute" information.  I would like to use this site to try and keep up to information as it happens. But finding it not that useful - franklly.   Reuters is just as fast and honestly, more reliable..   What drove the market higher (esp wheat) here in the last 1/2 hour?????  and then down.

[CitiFarmer]

Here is some information relating to today's FSA acreage and Prevented Planting report:

In August 2013 the Farm Service Agency (FSA) acres compared to January final 2013 acres showed the following:

Corn - FSA 8-2013 acres reported = 88.78 million vs. Final 2013 of 95.4 or an increase of 6.63 million which if added to the August 2014 FSA acres of 83.332 million equals a 2014 estimated acres total of 89.95 million vs. the current 91.6 figure shown in the August 12th USDA report.

Soybeans, FSA 8-2013 acres = 72.060 vs. Final 2013 of 76.5 million for an increase of 4.44 million which if added to the August 2-14 figure of 79.248 million equals possible 2014 planted acres of 83.69 million vs. USDA's August figure of 84.8 million.

Wheat, FSA 8-2013 reported acres = 51.677 vs. Final 2013 of 56.2 or a change of 4.52 million which if added to the August 2014 figure of 52.568 million equals 57.09 million vs. USDA's August crop report figure of 56.5 million.

Corn - potentially 1.65 million less 2014 acres times 91.5% times 167.4 = 252 million less production.

Soybeans - potentially 1.1 million less acres times 99.1% harvested x 45.4 yield = 49 million potential reduction in 2014 production.

Wheat - potentially 600,000 more acres times a 43.9 yield times a 81.8% harvested level = 22 million of potential added production in 2014.

The added acres include acres not reported to FSA each year or those not participating in the farm programs.

Corn, total of 1.54 million prevented planting (PP) acres, Soybeans - 827,000 PP, Wheat - 1.36 million PP. Total all areas of 4.231 million acres PP.

MN - PP corn = 395,000, Soybeans = 254,000, Wheat= 39,000
ND - PP Corn = 421,000, Soybeans = 259,000, and Wheat = 673,000 acres.


Just some figures to look at.

[Canuck_2]

I have been out and not following markets etc. this morning but just found this news report about Ukraine destroying part of a Russian armoured column on Ukraine side of the border.

http://www.cbc.ca/news/world/ukraine-artillery-destroys-part-of-russian-armoured-column-1.2737240

Report indicates the Ruble falling and I have to wonder what more action in that little war might do to the movement of wheat from the Black Sea area.

I think harvest is just beginning there.

[marketeye]

Canuck5,

My floor source says that the Russian news was the driver of the volatility in wheat. In his own words:

"Early this morning, somebody put in a program to buy beans, meal and corn by placing an order of 650 to 715 contracts. That buying pushed up the markets. Then the market broke a bit, due to confusion on the FSA U.S. Planted Acreage. Then the news of Russia's "aid" convoy was going to be attacked by Ukraine military. That global news rallied the wheat market by 18 cents, beans up 6 cents, corn up 5 cents. And then, wheat broke a dime, beans fell 5 cents, corn fell 3 cents. So, the market must not believe the Russian report or the FSA preliminary acreage data. The market is confused, as it grabs for straws and something new to trade," the floor trader says.

I hope this helps. No, I'm not Reuters.

Mike

[Hobbyfarmer]

All this morning's goings on is playing havoc with the bears plans.

[Hobbyfarmer]

I'm not so sure a rally would be in our best interests right now. 

SA is making planting plans right now. $3 corn just does not work for them, 

[Hobbyfarmer]

I think the market could put enough back in this to get SA to plant and keep a lid on this.  China with some production issues, 

We seem to have quite a few phantom acres with especially impressive yield numbers available to the traders and the USDA to trot out in some of the swing time reports.

As my feeble memory remembers it last year we had record plantings coupled with record frontline, non fringe acres idled (pp) .

This year very little was PP'd and acres seemed to vanish. My question is where and which way did they go? 

[Canuck5]

Thanks MIke.  Thats the kind of stuff I'd like to see on a regular basis.  I'm always frustrated that its difficult to find out what is moving the markets until hours after it has become ancient history.  There are lots of sources of current prices & price changes.  Most guys I know bookmark quote pages and look there for current prices first thing in the morning and throughout the day.  The best one I have found for grains is:  

http://www.e-adm.com/futr/futr_composite_window.asp

What is hard to find is "why" price changes are occuring, in real time.