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Veteran Advisor

Floor Talk December 22, 2020

At the close:

At the close, the March corn futures finished 3 1/2¢ higher at $4.43 3/4. May corn futures are 3/4¢ higher at $4.44.

January soybean futures closed 4¢ higher at $12.47 1/2. March soybean futures closed 2 1/2¢ higher at $12.50.

March wheat futures settled 5 3/4¢ higher at $6.17.


Jan. soymeal futures settled $2.70 per short ton higher at $415.00.


March soy oil futures closed 0.41 of a cent higher at 39.96¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.95 per barrel lower (-1.98%) at $47.02. The U.S. dollar is higher, and the Dow Jones Industrials are 161 points lower (-0.53%) 30,055 points.

At midsession:

At midsession, the March corn futures are 1 1/2¢ higher at $4.42 3/4. May corn futures are 3/4¢ higher at $4.42.

January soybean futures are 3 1/4¢ lower at $12.40 1/2. March soybean futures are 3 3/4¢ lower at $12.43 1/2.

March wheat futures are 4 1/2¢ higher at $6.15 1/2.


Jan. soymeal futures are $0.30 per short ton higher at $412.60.


March soy oil futures are 0.32 of a cent higher at 40.28¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.79 per barrel lower (-1.65%) at $47.18. The U.S. dollar is higher, and the Dow Jones Industrials are 100 points lower (-0.33%) 30,115 points.

 

Mike

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At 8:45am:

Investors handout Christmas gift to the soybean market Tuesday.

 

Mike

 

 

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7 Replies
Honored Advisor

Re: Floor Talk December 22, 2020

To me here in the sw..... where the trucks roll on, it fully appears that end users and ethanol are driving this market and investors haven't got a thing to do with it.  Haven't had a car drive in wanting to invest anything in agriculture.   Beef continues to be a strong buyer of corn -- Junes ground piles are half picked up already, Most of which are already owned or committed to either an ethanol plant or feed yards.   Of the corn I ship daily-- Ethanol and an Amarillo feeding conglomerate seem to be buying from brokers on short notice this week..... possibly filling the Christmas slot.

Oh yes I need to give credit to our export buyers who actually are continuing to "invest" in our production..... other publications report that china has now bought over half of the US milo production for 2020--- The corn export numbers from usda can't be right.  

But investors who buy corn in fact are the only ones that count...... Day traders don't buy much corn in the long run, ever.

 

Overnights were about even this morning after being a little up at times overnight.  Viewers of the Bethlehem star in a kansas corn field last evening got a pretty clear view-- without wind..... wind will show up in a huff on wednesday.

Advisor

Re: Floor Talk December 22, 2020

Merry Christmas to you all.  Typically I will become very quiet when the markets are moving in the right direction.  Very thankful for the correction since harvest as well as the election.  However I’m growing more concerned on these investors comments on positioning ahead of another countries weather.  Great to see the reaction due to SA lack of record setting seasonal conditions, but why so dramatic?  When the USDA botched the numbers hugely lol, and weather conditions altered the US crop, the market reaction was a mere fraction of this currently.  I guess what I’m asking is what happens in traders minds when another countries production has a far more potent effect on the markets then are own? My guess is denial and resilience.  The consistency of the US production vs. the unknowing of another.  When you have a market built on the fabrication of numbers from such an unproven source such as the USDA the last four years how do you justify that as an investor?  Happy holidays and keep these prices moving in the right direction. One thing is certain this year can’t come to a close soon enough.

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Senior Advisor

Re: Floor Talk December 22, 2020

Four years?  Come on, man.  USDA been that way as long as I can remember.

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Honored Advisor

Re: Floor Talk December 22, 2020

What happened to the Clinton LDP year's? 

Oh yea the liberal rewrite history thing...

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Senior Advisor

Re: Illinifarmer, you're right be suspicious, while we ....

Illinfarmer, you're right to be suspicious, while we can see the weather everywhere in the world today, what we can't always see are the forces behind the investors' money flows. They very well may be putting money into ag commodities for reasons completely unrelated to the weather.

Take corn for instance, while corn may not be as plentiful as previous there is corn around and ethanol demand & production is down.  We'll be lucky to burn 13 billion gallons this year and ethanol exports aren't all that good either.  And certainly, the ethanol price isn't all that strong.

And as far as soybeans go, Brazil is dry but not that dry, and they've been getting increasing precipitation lately.  Let's not forget how tough soybeans can be as long as the rain comes when they need it most at pod set & fill.

I don't know what all's behind this run-up in prices but we could very well see a reversal after the New Year. 

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Honored Advisor

Re: Illinifarmer, you're right be suspicious, while we ....

http://www.soybeansandcorn.com/news/Dec22_20-Labor-Unrest-Strands-More-Than-100-Vessels-at-Argentine...

 

For those that think a 30 to 40 day world wide supply and just in time delivery is adequate...

Maybe 100 plus ship loads being late like 20 + days late might be a slight fly in the ointment???

What a way to start the new year? 2020 the gift that keeps giving. 

Honored Advisor

Re: Illinifarmer, you're right be suspicious, while we ....

Merry Christmas to you also Illini,  

Not sure if it is the same thought but I think we agree --- It irritates me that we look for a foreign reason for the current move in the market like the market always moves on the crop that hasn't been planted yet(totally a vegas gambling trend traders viewpoint....)  When in my opinion actual bull market moves  above resistance, especially extended moves require a potential reduction in carry and are created by the previous crops.... The only exception to that comes through government intervention by distorting the market.....(ethanol being the most memorable recently) Quietly Loaning Russia $$ to buy wheat in 1974 handing them most of the US wheat crop at half what it was worth was also a market distorting move by our folks in DC.  Depressing the loan rate in the 1990s was a smooth way to take the floor out of the market by usda .  etc etc etc.  I am sure the Russians needed it and there are always good reasons like saving the planet for congressional intervention in markets but we have gotten a little blinded to what is around us when usda and every publication says every crop will be nearly a record......"you can count on it" every spring.

We just had too many problems this year to have much better than an average crop which might be 12.5-13 mb or my guess....LESS,....  We just had too many issues stacked up over the last three years.....problems that were big enough to destroy infrastructure.  The fringe has been in and out of good crops since 2011 drought, but this year I talked to producers in the dakotas who had a very dry year, Nebraska is the high plains strength yet just came out of the worst flooding I remember.  That hurts production for a while.  The southern plains is still living in and out of drought and the irrigation water is half what it was ten years ago in many areas.  Cotton acres therefore expand and much of the texas corn goes to silage and lower yields of corn.... acres there have been trimmed hard since 2014.......the delta region of california has very little corn these days when I leave the airport or train station of Sacramento I dont see corn like I used to.  Grapes grapes grapes.... the dot.com farmers are into grapes where 40 years ago was raised 300 bushel corn for the ships coming inland.  the eastern corn belt hasnt reported "best crop ever"   South has struggled through more hurricanes that usual.  You guys in Illinois and above you were the strong spots, especially after Iowa took the wind damage to the heart of the state and they don't send much of any grain down to the feedyard country the last few years.

Kansas is what we see here first and the movement of grain and basis into the feeders both say kansas didn't raise a lot of corn.  The Beltway needs to "put up or shut up" and deliver those big bushels they promise.

how do you justify that as an investor? I think they depend on usda for consistency and the crop for inconsistency.... the  fight between the two makes for faster reactions and more opportunity, because "investors" don't care which way it goes.  I don't think traders give us anything but a bully in the market, trading in volumes that should be illegal but DC is easy to buy off.

My thinking --- a contributor to this market         I think the usda's slight of hand with numbers may have come into play this fall to help drive this market.  usda--- 14.5 billion bushel corn crop and 5 to 6 billion used in ethanol production.  That ethanol production took a big dip in summer and quick usda reports never deal with the distillers grain produced--- cattle did not stop eating, the distillers grain got replaced by straight corn and still is in many lots.  So useage did not drop it just got diverted.  The beef market is still strong.  the conversion factor of 30 to 40% that ethanol takes out and gets replaced by roughage-stray and hay--in the ration but this year when ethanol stopped corn made up that 40%----- increased corn useage. at a time when we didnt have a lot of extra on hand.  Then the diseaster in Iowa and lots of facilities damaged   There are lots of reasons for us not to raise 14.5  and 80% of that is probably an average year at best...  thats 11.6   Kansas did not raise 80% if our 2014 yield-- water and reduced acres both did that... along with 70-80 mph winds in June.  The Iowa experience was not the only big wind felt this year ---- just too many issues.

I think usda would be far better off letting supply and demand determine the price and stop trying to make biofuels work through price manipulation and missreporting acres and hiding crop insurance data.  

IMO this market is with us for a while..... doesn't look like SA is going to flood the market,  Europe was down in production other than Ukraine.  Canada shows a drop in corn production on the NASS report.  Argentina feedgrains are  the largest % down of any country in the world  The Ukraine is the only increase in the world and many decreased in the nass report.  sorry this got too long....Now the wind is ripping through western kansas at 65 mph and is high all the way into Iowa.  Not a normal event for Christmas, the temp dropped and the weather report out of wichita this morning said there just isnt enough moisture in this system.  When the temps run up and down and the winds come through high........ we are in drought years.  Feed Report usda------

 https://www.ers.usda.gov/webdocs/outlooks/100046/fds-20l.pdf?v=6546.2

 

We have a fast rising market because of our own market price suppression bureau --- it will be with us until we can raise another and that may be next fall.

 

Great to read your input again....

Thanks

 

 

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