Floor Talk December 11 (Report Day)

[marketeye]

NOTICE: This is the final USDA Report that will come out at 7:30am. After today, the reports will be released at 11:00 am CT.

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At the close:

The March futures corn contract closed 2 cents lower at $7.28. Jan. soybean futures contract finished 2 cents lower at $14.72. March wheat futures settled 27 cents lower at $8.21 per bushel. The Jan. soyoil futures contract finished $0.95 lower at $50.20. The Jan. soymeal futures contract ended $3.20 per short ton higher at $448.10.


In the outside markets, the NYMEX crude oil is $0.24 per barrel higher, the dollar is lower and the Dow Jones Industrials are 80 points higher.

Mike

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At mid-session:

At mid-session, the March futures corn contract is trading 2 cents lower at $7.27. Jan. soybean futures contract is trading 2 cents lower at $14.72. March wheat futures are trading 25 cents lower at $8.23 per bushel. The Jan. soyoil futures contract is trading $0.82 lower at $50.33. The Jan. soymeal futures contract is trading $2.80 per short ton higher at $447.70.


In the outside markets, the NYMEX crude oil is $0.01 per barrel lower, the dollar is lower and the Dow Jones Industrials are 105 points higher.

Mike

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In early trading:

As of 10:10am, the March futures corn contract is trading 1/2 of a cent higher at $7.30. Jan. soybean futures contract is trading 1 cent lower at $14.73. March wheat futures are trading 23 cents lower at $8.25per bushel. The Jan. soyoil futures contract is trading $0.69 lower at $50.46. The Jan. soymeal futures contract is trading $3.10 per short ton higher at $448.00.


In the outside markets, the NYMEX crude oil is $0.12 per barrel higher, the dollar is lower and the Dow Jones Industrials are 106points higher.

Mike

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At 8am:

USDA announces Tuesday that China bought 115,000 tons of U.S. soybeans for 2012-13 delivery.

Mike

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At 7:30am:

USDA's WASDE Report says:

U.S. Ending Stocks (As of Aug. 31, 2013):

Corn=647 million bushels vs. its November estimate of 647 million bushels.

Soybeans= 130 million bushels vs. 140 million in November.
Wheat= 754  million bushels vs. the November estimate of 704 million bushels.

The report is seen as friendly for corn, with the ending stocks number unchanged from a month ago. The soybean number is lower than expected, so bullish there. But, the market is not reacting immediately...hmmm.

Report Notes:

--Corn-for-ethanol was left unchanged.

--Wheat exports lowered.

--Soybean exports were left unchanged at 1.345 billion bushels. Perhaps the biggest surprise? What do you think?

TRADE REACTION:

One floor trader says, "Corn and beans no surprise.  Market unwind of long bns/short corn into the report  Wheat bearish and tech selling below $8.40 wheat level.
SA weather now will be watched very close

--One analyst says, "The reports are mostly as expected by the trade, except for the wheat data.  
"The world wheat data is bearish, as more production and ending stocks shown.  Australia production went up which I am not sure I understand. Argentina's crop production numbers were unchanged which I also do not understand," he says.  
The report is seen as neutral-to-friendly, with no changes to U.S. numbers, he says.  
"The same for soybeans, with the report indicating increased crush, but exports left unchanged takes some of the bullishness out of it," he says.

--Another analyst says, "Today’s report had few surprises, but it does reaffirm the world’s dependence on corn, projecting global corn use that will exceed production by more than 13 million metric tons, which is over four hundred million bushels. The big story is still in soybeans, where the balance sheet remains historically tight and demand for soybeans and soybean oil is strong. Wheat stocks seem adequate, but this report does not take into account continued dryness for the current winter wheat crop in the United States and global wheat usage will exceed production by nineteen million tons. Total grain use remains strong globally and the pressure is on farmers to replenish low corn and soybean stocks in the coming growing season. The weather needs to be particularly kind to wheat growers, or the balance sheet will tighten again next year."

--Alan Brugler, President of Brugler Marketing & Management LLC, says the report won't help the bulls much.
"Soy oil exports up 50% from last month. It was expected higher, but that is a major revision. Increased crush, but meal and oil exports soaked up all of the extra production. World ending stocks for soy not changed much, won't help the bulls to extend the rally.
Wheat numbers are bearish, with US exports cut 50 million (expected, but not in the trade average guess). World stocks up nearly 3 MMT.
Weak wheat will tend to be a drag on corn, which saw almost no changes except for a tame .5 MMT cut in Argentine production.
USDA lowered cash average prices across the board," he says.

--Another analyst says, "No surprise here as everything came in line with pre-report estimates. Choppy two sided trade for corn and beans shows report day traders were disappointed in the numbers, generaly on report day if its not bullish we finish bearish."

Mike

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At 7:15am:

History shows this report is a quiet one. In 2008, the USDA caught the market off-guard with this report. But, in general, this report has had little influence. But, don't get lulled to sleep this morning.

Mike

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At 7am:

--Iraq buys 350,000 mt of Australia and Romanian wheat Tuesday. Ouch! Wheat market won't like that.

--Russia's grain exports, between July-Dec. period, totaled 12.0 mmt vs. 16.0 last year. Meanwhile, this year's grain harvest is expected to total 71.7 mt vs. 94.2 mt a year ago. The market will see this as price-positive.

Mike

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At 5:25am:

Early calls:  Subject to the USDA's WASDE Report to be released this morning at 7:30am CT. Corn and wheat are currently trading 3-5 cents lower, while soybeans are up 4 cents. 

Trackers:
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.45 per barrel higher.
Dollar=Lower.
Wall Street=Seen opening higher. 

World=Asia/Pacific stocks are higher, and Europe's stocks are higher.

Does anyone expect any surprises in today's report? The trade is much like a beautiful Christmas choir, all singing the same tune: Bearish corn and wheat, bullish soybeans.

More in a minute,

Mike

[marketeye]

Market News (Noise):

--Japan seeks 134,157 tons of milling wheat Tuesday.

--Soymeal leads soybean prices higher in China Tuesday.

--Record palm oil stocks could apply pressure to the soybean complex into 2013.

--Australia's 2012-13 crop exports are seen as flat.

Mike

[giolucas]

We all have been tipped off. Inside information. Now we need the report to report bullish info on beans.

[MauricioBLD]

Hi Mike, I do not think it is new but yesterday we continued to rain throughout most of the core area

[highyields]

I believe if they lower that bean number any lower that means we are out of beans.   They just adjusted their numbers.  Lower wheat exports is a tad bit odd.  course we weren't exporting much before the Thanksgiving.  

I still say $20 beans,  everyone is waiting for a "rally" in corn but everyone has to remember we are only about a $1 away from the all time high when we get on the top end of this range.   this last time down in corn didn't go as deep on the charts as the one a month ago, I'm thinking that we'll make a break out of the top end of the range this time on Dec. Corn.  

Fundamentally we all know that the crops are short,,,technical is what leads the markets now.   and money flow.  

[marketeye]

Mauricio,

I understand that Argentina and Brazil's weather is turning favorable for crop development. Would that be your assessment out your window in Rosario, Argentina? And, how are folks reacting to today's USDA WASDE numbers?

Thanks,

Mike

[Mizzou_Tiger]

To counter a potentially really bad wheat crop by getting bushels ahead to soften the blow......

As mentioned before, we knew they couldnt hide the tightness in soya forever.......likely more bullish in Jan......

And corn is till beng chewed up.........when they drop that harvested number in Jan........look out.......

[giolucas]

This is my TRADE REACTION, these guys have to make money so lets take it down first then bring in the fundamentals, China buying and ending Soybean stocks dropping 10M.....   and we end the day up 7 to 10 cents. 

[Jim Meade / Iowa City]

If beans go up, corn will go with it if we wait long enough.  I bet farmers will sit on their stocks.  Most don't need the money badly right now and there is a lot of SA and US weather to play out.  A person could get burned really bad or strike it rich.

[highyields]

Its one of those **bleep** if you **bleep** if you don't sell your corn.