Floor Talk February 2

[marketeye]

VIDEO: Grain Market Summary for February 2, 2012.

Mike

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At the close:

The March corn futures settled 1 cents higher at $6.43. The March soybean contract closed 1 3/4 cents higher at $12.17. The March wheat futures settled 11 1/2 cents lower at $6.62. The March soymeal futures closed $1.10 per short ton higher at $323.40. The March soyoil futures closed $0.10 higher at $51.19.
In the outside markets, the NYMEX crude oil is $1.94 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 8 points.

There are still weather risks for Russia and Europe's wheat, with below freezing temps coming this week and next. However, the trade sees the market overbought, as funds covered a lot of short positions earlier this week. U.S. wheat is not as cheap as other parts of the world, resulting in weak weekly export sales today. Corn and soybean demand, although not great, is good enough to get market support.

Mike

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At mid-session:

At mid-session, the March corn futures trade 1 1/4 cents higher at $6.43 1/4. The March soybean contract is trading 3 3/4 cents higher at $12.19. The March wheat futures are trading 4 1/4 cents lower at $6.70. The March soymeal futures are trading $3.20 per short ton higher at $325.50. The March soyoil futures are trading $0.18 lower at $51.00.
In the outside markets, the NYMEX crude oil is $1.94 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 28 points.

Mike

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At 10:25am:

Farm markets have turned higher. The March corn futures trade 3 1/4 cents higher at $6.45 1/4. The March soybean contract is trading 6 1/2 cents higher at $12.21 3/4. The March wheat futures are trading 4 cents lower at $6.70 1/4.

Buying has stepped into the corn and soybean market.

Mike

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At the open:

At the open, the March corn futures trade 5 cents lower at $6.37 1/4. The March soybean contract opened 6 3/4 cents lower at $12.08 3/4. The March wheat futures opened 5 cents lower at $6.68. The March soymeal futures opened $1.10 per short ton lower at $321.20. The March soyoil futures opened $0.18 lower at $51.00.
In the outside markets, the NYMEX crude oil is $0.91 per barrel lower, the dollar is higher and the Dow Jones Industrials are up 3 points.

Mike

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At 8:05am:

USDA announces that Japan bought 107,340 mt of U.S. corn Thursday for 2011-12 delivery.

Mike

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At 7:31am:

USDA Weekly Export Sales:

Corn=975,000 metric tons vs. the trade's expectation of 700,000-950,000 mt.

Soybeans=368,400 mt vs. the trade's expectations of 350,000-550,000 mt

wheat=554,100 mt. vs. the trade's expectations of 400,000-600,000 mt

Soymeal=74,700 mt. vs. the trade's expectations of 75,000-150,000 mt

Soyoil=6,700 mt. vs. the trade's expectations of 0-10,000 mt.

Looks like strong report for corn, mild for soybeans and friendly for wheat market.

Other News & Notes:

--China's January soybean imports were estimated at 5.29 mmt, down slightly from Dec. And China's Feb. soybean imports are expected to drop 2.67 mmt, according to that country's Commerce Director.

--India is set to have a record wheat crop for 2011/12 at 88.31 mmt.

--Russia/Ukraine wheat weather wasn't (was not) cold enough yesterday to convince the market of further winterkill. But, the damaging temps will return tonight, one weather group says.

--Informa, the market analyst firm, will release its February World Production estimates tomorrow at 10:30am CST, ahead of next Thursday's USDA February Supply/Demand Report.

--New estimates on Brazil show a smaller soybean crop this year and current soybean export pace is slower than normal.

Plenty of bullish and bearish nuggets there to throw into your cereal bowl this morning. A lot of noise huh?

Mike

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At 7:15am:

--Japan buys 94,389 mt of U.S. milling wheat Thursday.

--Jordn buys 150,000 metric tons of wheat, but not from the U.S.

--Taiwan  buyer purchases 23,000 mt of U.S. corn, 12,000 mt of U.S. soybeans.

This morning, the USDA Weekly Export Sales report will be released at 7:30am CST.

Mike

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At 6:45am:

Early calls: Corn 7-9 cents lower, soybeans 6-8 cents lower, and wheat 9-11 cents lower.

Trackers:
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.95 per barrel lower.
Dollar=Higher.
Wall Street=Seen trading flat ahead of U.S. Jobs Report Thursday morning.

World Markets=Asia/Pacific stocks trade higher. Europe stocks are lower.

More in a minute,

Mike

[marketeye]

The CME Group Thursday announced a new fund to protect farmers from a future MF Global debacle. What do you think?

"Under the Family Farmer and Rancher Protection Fund, expected to be in effect by March 1, 2012, farmers and ranchers using CME Group products will be eligible for up to $25,000 per account in the case of losses resulting from the future insolvency of a clearing member or other market participant, according to the CME Group press release.  Farming and ranching cooperatives also will be eligible for up to $100,000 per cooperative. If losses in a future failure total more than $100 million, participants will be eligible for a pro-rata share of the fund, up to $100 million.  This new fund is expected to be backed by an insurance policy and will not be available retroactively."

Meanwhile, CME Group agricultural commodity trade volume for January was flat compared to a year ago, the exchange reported Thursday. "CME Group agricultural commodities volume averaged 1.1 million contracts per day, flat compared with the prior year period, and up 29 percent compared with December 2011," according to the CME Group release. 

Mike

[sw363535]

Mike,

It seems like a bit of a token move.  With the amount of risk on just a few contracts and the current coverage levels.

[vrbuck]

we are back below the 100 day moving average.....................very bearish.

[marketeye]

The release does go on to say more protection measures are being studied and will be implemented down the road.

Mike

[Silverwheaton]

Corruption to high heaven.  Why don't they start with those that just lost money.   You act like this is some great news.  Time comes, and then there will be another loophole they can use.  Just a bunch of money hungry crooks!!  They will never get a dime of my money directly ever again!

[marketeye]

Silverwheaton,

Whoah there! I'm not saying or acting like this is great news. To me, it's simply news. I'm just passing it along. You can respond how you like, that's the way it should  be. I just want you all to know what the latest is with the situation. It's not my job to play judge on this deal. If the truth be known, you and I probably share similar feelings about what has happened. But, yes, feel free to sound off.

Thanks,

Mike

[hihowRya]

So thier admitting that measures already in place were broken and it will happen again.

"THAT'S NICE" Punch line from a joke instead of BU**SH**.

[Hobbyfarmer]

THE TOP IS IN

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

by Duane Lowry
Thursday, February 2, 2012

OPENING CALL:
Corn= lower,     Wheat= lower,     Soybeans= lower.

*At 6:41 am> Night session results: Corn= 7 lower,     Wheat= 11 3/4 lower,     Soybeans= 8 1/2 lower.

*Export Sales data will be released at 7:30. Here are the trade estimates: Wheat= 500-700 tmt, Corn= 700-1100 tmt, Soybeans= 450-750 tmt, Soymeal= 100-200 tmt, Soyoil= 0-15 tmt.

Weather offers favorable/acceptable conditions for Brazil and Argentina.             

Wheat will start lower on overnight weakness, which has values 20 cents off yesterday morning's high. The Ukraine freeze emotional event of yesterday appears to have produced a culmination event and top to the recent price rally. Technical conditions should inspire a correction event to unfold during the next few weeks, but choppy trade will remain the rule.                      

Corn will start lower on overnight weakness. Price action says we have topped this market for a while. Trader sentiment remains bearish, but most were chased to the sidelines yesterday. Expect selling interest to build near yesterday's settlement price, limiting short-term recovery from the overnight losses. Downside could be very notable during the next month.                                      

Soybeans will start lower on overnight weakness. News is limited. The fundamental backdrop remains bearish and ready to justify any break at any time. Technical conditions suggest limited ability to challenge yesterday's highs. Overall conditions warn that downside risk during the next month could be a real flushing break, something more than 50 cents and possibly near the December lows?                                    

In summary, we have defined short-term upside parameters with the last several days of trade. Technical conditions warn of a significant downside price risk during the next month, with fundamental factors offering little to thwart such an event. Producers need to recognize the merit of short-term sales and a rejection of such may mean having to wait for a spring/summer weather fear before returning to levels higher than current values. At 6:40 this morning: Crude was down $1.13, Gold was down $3.70, Dow Index was down 18 and the US $ was up 22.

CORN:
Barge Values: Feb= +71 H
CH: Support= 6.10,   Resistance= 6.41-45

**PROFILE: March Corn> The finishing touches on the defining of this top are taking shape. Current levels need to be searched for selling opportunities. Overall conditions warn of notable downside risk during the next month.    

[marketeye]

Hobbyfarmer,

Great to see what Duane thinks. Now, what about you? Do you feel like the "top is in"? There seems to be a lot of uncertainty out there, for all of these commodities.

Mike