Floor Talk December 21
At the close:
At the close, the March corn futures settled 2¢ higher at $3.51. May futures finished 2¢ higher at $3.59. Jan. soybean futures settled 5 1/4¢ lower at $9.48 3/4. March soybean futures closed 5 1/4¢ lower at $9.59. March wheat futures closed 3¢ higher at $4.27. January soy meal futures ended $1.60 per short ton lower at $318.10. January soy oil futures closed 0.30 lower at 32.83¢ per pound. In the outside markets, the NYMEX crude oil market is $0.25 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 85 points higher.
At mid-session, the March corn futures are 2¢ higher at $3.51. May futures are 2¢ higher at $3.59. Jan. soybean futures are 5¢ lower at $9.49. March soybean futures are 5 1/4¢ lower at $9.59. March wheat futures are 3¢ higher at $4.26. January soy meal futures are $0.60 per short ton lower at $319.10. January soy oil futures are 0.27 lower at 32.86¢ per pound. In the outside markets, the NYMEX crude oil market is $0.10 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 111 points higher.
Jason Ward, Northstar Commodity managing director, says that the weakness in the soybean market is being caused by end-of-year liquidation of long soy/short corn/wheat spreads.
“But, we could be seeing some new shorts entering due to ongoing beneficial growing conditions in Brazil for soybeans and some beneficial rains being seen in Argentina,” Ward says.
My weather contacts in Brazil/Argentina are calling this rainfall for Argentina as the best rains in two months, but not enough to fully erase moisture deficits. We are hearing early soybean yields in Paraguay as poor, 10-15 bu/acre.”
The corn and wheat markets Thursday are benefiting from solid export demand (2 weeks in a row for wheat) and likely short covering, he says.
“In the bigger picture, we are seeing something develop in the feed market worth mentioning. We are hearing large hog producers reducing DDGS in their rations and replacing it with more soybean meal and more corn. DDGS (due to high demand) have rallied to levels above corn that it is now financially beneficial to reduce it in the ration and increase meal/corn,” Ward says.
This can do 1 of 2 things or possibly both, he says.
“This could support the soymeal basis which has been very weak due to record crush and relatively weak domestic demand. plus, it could reduce ethanol margins as high priced DDGS have been carrying margins. So, we could see weaker DDGS values in the months ahead which would pressure ethanol margins,” Ward says.
If you missed it, the USDA Weekly Export Sales Thursday came in stronger than expected for corn and wheat.
Wheat= 833,200 metric tons vs. the trade’s expectations of between 300,000-600,000 mt.
Corn= 1.56 million mt. vs. the trade’s expectations of between 800,000-1,300,000 mt.
Soybeans= 1.76 million mt. vs. the trade’s expectations of between 1,000,000-2,100,000 mt.
Soybean meal= 210,100 mt. vs. the trade’s expectations of between 175,000-325,000 mt.
At 9am, the March corn futures are steady at $3.49. May futures are 1/4¢ higher at $3.57. Jan. soybean futures are 4 1/4¢ lower at $9.49. March soybean futures are 4 1/4¢ lower at $9.60. March wheat futures are 1/2¢ lower at $4.23. January soy meal futures are $0.20 per short ton lower at $319.50. January soy oil futures are 0.44 lower at 32.69¢ per pound. In the outside markets, the NYMEX crude oil market is $0.42 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 83 points higher.
Beans and grains were again little changed ahead of the long Christmas weekend on low volume. It's quiet as the traders who actually made it to the board this morning are likely heading off to Ceres for a drink or two or six early today before heading back to Barrington or Libertyville or Flossmoor. Some might trickle in tomorrow, but let's just say it's not a spirited trade this week. Next week likely will be similar as prices will be stuck in a trading range at least through the first of the year. Soybeans were down about 2 cents and corn and wheat both moved less than a penny overnight. Good news on ethanol production -- despite falling for a second straight week, production of the biofuel is still at extremely lofty levels. That led the USDA to raise its outlook for how much corn will be used in ethanol production. In weather news, it's going to be cold and snowy for travelers on Interstate 80 across Nebraska today as freezing drizzle will fall in the east and snow is expected in the west. Check out all the details in today's 3 Big Things at https://www.agriculture.com/news/three-big-things/3-big-things-today-december-21.
Brent Crude Oil = down 0.1%.
West Texas Intermediate = down 0.2%.
Dollar = up 0.2%.
Wall Street = U.S. stock futures higher in pre-market trading.
World Markets = Global stocks higher overnight.