Floor Talk December 17

[marketeye]

At the close:

The Dec. corn futures contract closed 3 1/2 cents higher at $4.26. The Jan. soybean futures contract settled 8 3/4 cents higher at $13.46. March wheat futures ended 2 cents lower at $6.19 per bushel. The March soymeal futures contract closed $6.80 per short ton higher at $436.60. The March soyoil futures finished $0.47 lower at $39.63.
In the outside markets, the NYMEX Brent crude oil is $1.08 per barrel lower, the dollar is lower and the Dow Jones Industrials are 30 points lower.

Mike

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At mid-session:

The Dec. corn futures contract is trading 4 1/2 cents higher at $4.27. The Jan. soybean futures contract is trading 11 3/4 cents higher at $13.49. March wheat futures are 1 3/4 cents higher at $6.23 per bushel. The March soymeal futures contract is trading $6.60 per short ton higher at $436.40. The March soyoil futures are trading $0.31 lower at $39.79.
In the outside markets, the NYMEX Brent crude oil is $0.83 per barrel lower, the dollar is higher and the Dow Jones Industrials are 23 points lower.

Jack Scoville, PRICE Futures Group vice-president, says today's rally has been firm all day.  
"I think just no offers in the market and the market needs a little corn is driving these markets higher. It does not hurt that Japan bought all that corn too, after all the rejections from China.  That corn is finding a home.," Scoville says.  
Beans a bit of a mystery, but it's more suspicion, more talk of Chinese buying, he says.  
"I think, though, what we are really seeing is a lack of offer for beans and corn in the cash market, with specs buying corn to get out of some shorts, but seemingly willing to go longer in soybeans futures.  The beans are moving out as we saw in the export inspections yesterday, but domestic demand is said to be covered into late next month.  I was expecting a softer day in the beans, but they held support and are looking pretty impressive right now."

Another analyst adds, "Beans are leading the way up on talk of dry weather in argentina and south east brazil. That and yesterdays friendly export inspection report for beans and a better than expected crush report all brought in light buying."

Mike

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At the open:

The Dec. corn futures contract is trading 1 cent higher at $4.24. The Jan. soybean futures contract is trading 5 3/4 cents lower at $13.32. March wheat futures are 3/4 of a cent higher at $6.22 per bushel. The March soymeal futures contract is trading $1.00 per short ton lower at $428.40. The March soyoil futures are trading $0.08 lower at $40.02.
In the outside markets, the NYMEX Brent crude oil is $0.93 per barrel lower, the dollar is higher and the Dow Jones Industrials are 10 points lower.

Mike

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At 8am:

--USDA announces Tuesday that Japan bought 278,384 tons of U.S. corn for 2014-15 delivery.

Mike

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At 7:25am:

Early calls: Corn is seen 1-2 cents lower, soybeans 3-5 cents lower, and wheat 1-2 cents higher.

Trackers:
Overnight grain, soybean markets=Trading mostly lower.
Brent Crude Oil=$0.66 per barrel lower.
Dollar=Higher.

Wall Street=Seen higher.

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

More in a minute,

Mike

[marketeye]

The Brazilian soybean crop keeps getting bigger, according to our friends at Gazeta do Povo newspaper and its Crop Expedition report. This morning, I received the latest numbers from the Crop Expedition, the crop tour that has toured the vast majority of the country.

Though some of the states have soybeans in the bloom stage, the plantings increased recently for those states just finishing. The increase reached 7 % - amounting to around 29.49 million hectares - an extra 2% in comparison with projections of the start of the season in September. And the production is expected to reach 91.05 million tons - 2 million more ( 2.7 % ) than the volume registered in the United States, Gazeta do Povo report states.
The expansion in soybeans is outweighing the decrease in corn acres. Corn lost 9.5% of the area that it held last summer, dropping to 6.9 million hectares, the report states. With a normal weather year, the harvest of the soybeans could be up 9 million tons vs. a year ago, while corn harvest is expected to lose only 1 million tonnes.

It is growth that brings these two products to 125.9 million tonnes (excluding maize winter ) and promises a national grain harvest of 200 million tons. If realized, that total harvest figure would be 50 % higher than the 2006/07 (eight years ago ) harvest when the crop Expedition was launched," the report states.

Mike

[marketeye]

It's that time of the year. International sources are weighing in on their backyard crop reports. As I mentioned earlier this morning, Brazil is on constant crop-watch right now. Just a moment ago, a financial advisor contact of mine from Paraguay says the weather is leaning dry.

In his own words:

"It is getting dry in Paraguay AND Rio Grande do sul. Nothing to worry about...yet....BUT no rain for the next 10 days. Some would "like some rain, but nothing in sight to be followed...."

Now, this is a Marketeye-based question: What do you think? Can we spark a rally off of this weather concern in South America?

Mike

[Blacksandfarmer]

Mike, thanks for the S.A update. Even if the S.A beans are not in the pod fill stage, flowering is still a critical stage for those beans. Right now the amount of pods are being determined. Even if they have fewer pods, late rains could fill those pods rather well. If we can get some sort of weather rally going in beans I may pull the trigger on selling some new crop beans. I sold all of my beans off the combine, so an old crop cash rally wouldn't mean much to me.

[jrsiajdranch]

I think the reason for any move today or tonight will be over the fomc statement tomorrow. I firmly believe that bomber Ben takes the hit for calamity Jane and starts the taper. Therefore I believe a sell off will happen if the Goldman's get the leaked info before the close. Gotta love our addiction to a paper currency!

[Palouser]

Considering that (IMO) equities would not be what they are w/o Fed intervention the likely fall in equities could be sharp and the financial institutions get out quickly. There really isn't any other good option other than to actually loan money that might actually affect the economy. From that POV a fall in stock prices might be a net positive. However, the middle class is declinging so rapidly I'm not sure it might be too little too late. Restructuring tax regulation doesn't seem to be in the cards.

[WCMO]

Yet, if they begin to taper, and at the same time lower the rate the fed pays banks to park their excess funds, it might be a wash economically -- the banks reduce their holdings, thus stimulating other investments and/or loans to recapture their earnings.  Personally, I think the fed should limit the rate paid to banks to the rate that bank pays on demand deposits, just to even things out a little -- just doesn't seem "right" that the bank should be able to make money off of "excess funds" parked at the fed, over and above what they pay out on demand deposits, and the transaction costs would have to be miniscule.