Floor Talk February 20

[marketeye]

At mid-session:

The March corn futures contract is trading 1/4 of a cent lower at $4.53. The May soybean futures contract is 4 3/4 cents higherat $13.46. May wheat futures are 3 cents lower at $6.10 per bushel. The May soymeal futures contract is trading $0.60 per short ton higher at $437.10. The May soyoil futures are trading $0.24 higher at $40.76.
In the outside markets, the ICE Brent crude oil is $0.22 per barrel lower, the dollar is higher and the Dow Jones Industrials are 69 points higher.

Mike

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At the open:

The March corn futures contract is trading 1 1/4 cents lower at $4.52. The May soybean futures contract is unchanged at $13.42. May wheat futures are 1 3/4 cents lower at $6.11 per bushel. The May soymeal futures contract is trading $0.60 per short ton lower at $435.90. The May soyoil futures are trading $0.14 higher at $40.66.
In the outside markets, the ICE Brent crude oil is $0.52 per barrel lower, the dollar is higher and the Dow Jones Industrials are 37 points higher.

Mike

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At 8am:

Dan Looker, Successful Farming/Agriculture.com Business Editor, is on the scene at the USDA Outlook Conference. He reports that the government sees record exports in 2014-15.

USDA sees record exports in 2014-15

USDA Outlook's 2015-15 Acreage and Average Price Estimates:

Corn= 92.0 million acres

Soybeans=79.5 million

Wheat=55.5 million

2014-15 Average Price Estimates:

Corn= $3.90

Soybeans=$9.65

Wheat=$5.30

What do you think of these numbers? I'd be interested to hear from you.

Mike

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At 7:30am:

Early calls: Corn is seen 1-2 cents lower, soybeans 5-7 cents lower, and wheat 1-2 cents lower.

Trackers:
Overnight grain, soybean markets=Trading lower.

ICE Brent Crude Oil=$0.58 per barrel lower.
Dollar=Higher.

Wall Street=Seen lower, with the mentality of less Fed stimulus, slow Chinese growth, and Wal-Mart earnings missing badly Thursday.

World Markets=Asia/Pacific stocks were mixed-to-lower, Europe stocks lower.

More in a minute,

Mike

[aaron-neill]

Record exports, 92 million planted and $3.90 corn do not go hand in hand.  You can have 2 of the 3 but not all of the above.  With $3.90 corn we will plant even less corn next year and have under 1B bushel carryover.  Any of these jokers priced inputs lately?  They still reflect $5-6 corn, rents in some cases $6+  100% corn in 2013 back to 60-40 rotation in 2014 and adding wheat back in.

[p-oed Farmer]

Mike..... I would say that those type of planted #.s do reflect low 4.00 corn prices..... What they do not represent are the prices that we would have if we only plant 92 mil acres......p-oed

[p-oed Farmer]

I do agree with Aaron ..... If we stay at the type of prices over an extended period of time we will see huge demand come at the corn market.....p-oed

[sw363535]

totally agree aaron-neill,

I bristle when we get the "COP is not important" lectures.  Long term the market will reside in the "comfort zone" of commerce.  Defined by cost of production on either side of the market.

Markets will go above the zone and below it to control production, but will always be looking  to find away back into the comfort zone for producers and end users.

knowing what we can afford to get and survive and what the end user can pay to survive is important.

 the $4.20 range was below the comfort zone so the market is trying to fight back into it to maintain production.

The two bankers i visit with in our area tell me the COP in our area is north of $4.50 and not going down.  

[roarintiger1]

sw,  good post. I agree.

BTW, The one thing that the USDA could probably do a decent job of projecting would be the cost of production.  Because almost all costs are already known.      

[farmerguy89]

The wheat one seems timely, but it's going the other way. Maybe I could believe corn being that low in areas, but not widespread just yet.

Can't predict a thing if you tried, so don't ever believe you can

[sw363535]

Rt ----- the problem working with known numbers is accountability and responsibility.   Things us carreer folks would like to avoid.

I just do not see costs going down ---- but I have been supprised before.   Maybe china is ready to come on line with their new gmo traits??   And will flood the US market with cheap fertilizer??  Then there may they will suddenly own JD...................

MAYBE --------------- we are going to fight hyper inflation with the rumor of cheap commodities.......................