Floor Talk February 6

[marketeye]

At mid-day:

The March futures corn contract is trading 5 cents lower at $7.25. The March soybean futures contract is trading 8 cents lower at $14.87. March wheat futures are trading 4 cents higher at $7.61 per bushel. The March soyoil futures contract is trading $0.35 lower at $52.63. The March soymeal futures are trading $2.70 per short ton lower at $435.80. 


In the outside markets, the NYMEX crude oil is $0.08 per barrel higher, the dollar is higher and the Dow Jones Industrials are 5 points higher.

Mike

---------

At the open:

The March futures corn contract is trading 6 cents lower at $7.22. The March soybean futures contract is trading 14 cents lower at $14.81. March wheat futures are trading 6 cents lower at $7.50 per bushel. The March soyoil futures contract is trading $0.41 lower at $52.57. The March soymeal futures are trading $4.00 per short ton lower at $434.50. 


In the outside markets, the NYMEX crude oil is $1.19 per barrel higher, the dollar is higher and the Dow Jones Industrials are 29 points lower.

Mike

------------

At 9am:

--A lot of talk about weather models showing better chances of rain for southern Brazil/northern Argentina in the next 5 days or so. As a result, lower markets today.

--Brazil and Russia will eliminate import tariffs on wheat, beginning in April. This should help U.S. wheat exports.

--This week, there is a big farm show in the Brazilian state of Parana, Brazil. The Ag Minister is estimating a 2013 grain output of 185 million tons. Also, Brazil has lifted its wheat import tariff. This means wheat from outside of the Mercosur will be allowed in without a tariff. This could open up more U.S. wheat exports to Brazil, this year.

--Also, a lot of soybean rust cases have been reported in Brazilian soybean fields this week. The southern state of Rio Grande do Sul has the most cases with 77, the state of Parana second-highest with 71. Mato Grosso has rust also. The cases are unusually higher this year.

Mike

--------------

At 6:45am: 

Early calls:  Corn is seen 5-7 cents lower, soybeans 10-12 cents lower, and wheat 3-5 cents lower.

Trackers:
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.59 per barrel lower. 
Dollar=Higher. 
Wall Street=Seen mixed, as Japan stocks rally after its bank's  governor announced that he will step down. This paves the way for more quantitative easing measures in Japan.

World=Asia/Pacific stocks were mostly higher and Europe's stocks mixed.

More in a minute,

Mike

[highyields]

Do you think that soy rust will hurt the yields down there.  I read that since the rust is so prevalent down there this year that second crop of beans that are planted may have to have 5 applications of fungicide on them.  

[vzapletin]

are the ethanol numbers out yet?

[giolucas]

MIke,

if the rust is so prevalent for soybeans in Brazil shouldn't we be going higher?? Much higher?

[noreaster]

I may be misunderstanding but usually the news of rust in SA bean crops has the potential to increased volume of overall crop.  The news of rust leads to vigorous spraying campaign which not only stabilizes yields but increases them.  This is much like fusarium alerts in my neck of the woods..... Once little chiicken says the sky is falling absolutly everyone is out spraying if they need to be or not.... And since guys are out anyways they add pesticides and foliar fertilizer to get the extra yield bump to pay for the effort... Thus yields go up....

[marketeye]

giolucas,

Asian soybean rust reports do not scare the markets like they use to. But, I did learn, as I posted, the rust cases are higher than normal this year. That report was released Tuesday.

Mike

[giolucas]

Noreaster and Mike,

Thanks for the lesson.  I am long Soybeans anyway going into the report.

[marketeye]

Let's talk profit potential. So, I received this note on Nov. 20, 2012, from a reputable grain analyst firm. Has anyone done the math, and has anything changed since Nov. 20? I realize Dec 13 corn closed at $6.23 per bushel on Nov. 20 vs. $7.25 today.

He said then:  "Mike, here is a report we did on the need for hedgers to get active soon. Note that profit per acre is higher for $615 Dec 13 corn for new crop as compared with 2012 which was calculated at $735.

Mike

[c-x-1]

Mike,

can you elaborate? i didn't understand the quote. was analyst talking about the old/new spread widening?

thanks,

c-x-1

[Faust100F]

Mike . . . wait a minute. . . that is 43 million tons less than was posted yesterday on here (this site) from those guys that "know jack" about Brazi the Brazilian officialsl.  

Kinda funny, that yesterday it was 223 million tons of soybeans, (up 23%) and today it is 185 million tons or 666,000,000 bushels, yesterday I think it was 780,000,000 bushels.  Nice to see the Brazilian officials and those that "Know Jack" are in the same league as Larry, Moe, and Curley at USDA.  Adios. John