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Veteran Advisor

Floor Talk, December 12, 2019

At the close:

At the close, the March corn futures finished 6 1/4¢ higher at $3.77. May corn futures ended 6 1/4¢ higher at $3.84 1/4.

Jan. soybean futures settled 4 3/4¢ higher at $8.98 3/4. March soybean futures closed 4 3/4¢ higher at $9.12 1/4.

March wheat futures finished 11¢ higher at $5.30 1/2.



January soymeal futures closed $0.80 per short ton lower at $294.20.

 January soy oil futures finished 0.79 cents higher at 32.23¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.60 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 250 points higher.

Mike

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At midday:

At midday, the March corn futures are 6 1/4¢ higher at $3.77. May corn futures are 6 1/4¢ higher at $3.84 1/4.

Jan. soybean futures are 4 3/4¢ higher at $8.98 3/4. March soybean futures are 4 3/4¢ higher at $9.12 1/4.

March wheat futures are 12¢ higher at $5.31 1/2.



January soymeal futures are $0.70 per short ton lower at $294.30.

 January soy oil futures are 0.71 cents higher at 32.15¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.71 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 133 points higher.

Greg Lumsden, Cargill, says that the grain market finally participated in positive, broad-based risk appetite, working higher across the board.

“There are three main factors that are giving corn, beans, and wheat a lift. First, newswires reported that Trump met overnight with his trade negotiation team. Second, Trump tweeted this morning that ‘They want it (a deal), and so do we!’ which was a surprisingly positive view of the U.S. position,” Lumsden says.

Lastly, Dow Jones reported that the U.S. team has offered to delay the December 15th tariffs and reduce tariffs by 50% on $360B worth of Chinese imports, Lumsden says.

He added, “Adding a tailwind, the first EU wheat production estimates for new crop were significantly below last year. And, we saw exports at the high end of expectations for corn, wheat, and beans, along with a USDA daily flash sale of 1.6M mt of corn sold to Mexico.

Though this type of sale happens every year at this time when a Mexican rail customers buy a years worth of corn, the market has been starving for positive news and this helped sentiment, Lumsden says.

“The market spiked but has now paused as traders are leery of buying into trade headlines given the performance of the last 18 months. Plus, South American forecasts have turned a little wetter than earlier in the week. If we do in fact see tariffs removed, or enough tariffs removed to make import margins on corn, wheat, ddgs, sorghum, and ethanol positive, the price structure (trading range) will move higher for all three products. We are at a key point in the trade story, but the market will require concrete details before extending higher,” Lumsden says.

 

Mike

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At 8:45am:

In early trading, the March corn futures are 3 1/4¢ higher at $3.74. May corn futures are 3 1/4¢ higher at $3.81 1/4.

Jan. soybean futures are 1 3/4¢ lower at $8.91 3/4. March soybean futures are 1 3/4¢ lower at $9.06 1/4.

March wheat futures are 4 1/2¢ higher at $5.23 1/2.



January soymeal futures are $0.70 per short ton lower at $294.30.

 January soy oil futures are 0.24 cents higher at 31.68¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.10 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 27 points lower.

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

--Export sales of 1,600,200 metric tons of corn for delivery to Mexico. Of the total, 1,074,420 metric tons is for delivery during the 2019/2020 marketing year and 525,780 metric tons is for delivery during the 2020/2021 marketing year; and

--Export sales of 110,744 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that the outside markets could help bolster exports.

“With the U.S. dollar drifting back down to the lower end of the range and U.S. corn futures under pressure, we could see an uptick in export sales.”

Kluis added, “The funds were in full force on Wednesday. Soybeans led the way lower. We just could not break through tough resistance around the $9.00 futures level again in January futures. Corn did manage to drift lower and fill the gap on the continuation chart. The markets seem content to trade in a sideways pattern, waiting until we get the January 10, 2020 crop report.”

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures.

Corn= 874,000 metric tons vs. the trade’s expectations of between 400,000-800,000 mmt.

Soybeans= 1.05 million metric tons vs. trade’s expectations of 500,000-1.1mmt.

Wheat= 503,000 mt. the trade’s expectations of between 200,000-450,000 mt.

Soybean meal= 239,000 mt. the trade’s expectations of 125,000-300,000mt.

 

What say you?

 

Mike

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