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Veteran Advisor

Floor Talk January 28

At the close:

The March corn futures closed 8 cents lower at $3.73 1/4 per bushel.
March soybean futures finished 3 1/2 cents lower at $9.70 1/4.

 

March wheat futures settled 13 3/4 cents lower to $5.05 1/4. The March soybean meal futures settled $0.80 per short ton higher at $337.40. March soyoil futures finished $0.83 lower at $30.34.

 

In the outside markets, the crude oil market is $1.56 lower per barrel, the U.S. Dollar is higher and the Dow Jones Industrials are 41 points lower.

 

Mike

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At mid-session:

The March corn futures are trading 3 cents lower at $3.78 per bushel.
March soybean futures are trading 1 1/4 cents lower at $9.72.

 

March wheat futures are trading 12 cents lower to $5.06. The March soybean meal futures are trading $2.40 per short ton higher at $339.00. March soyoil futures are trading $0.95 lower at $30.22.

 

In the outside markets, the crude oil market is $1.02 lower per barrel, the U.S. Dollar is higher and the Dow Jones Industrials are 57 points higher.

Matt Connelly, Futures International, LLC trader on the floor of the CME Group, says that wheat is a weak sister today.
“It feels like funds are short and getting shorter prior to month-end. Obviously, wheat is most effected by U.S. Dollar strength. Think we will start talking about lack of snow cover and potential winter kill in the weeks to come,” Connelly says.
Corn is trading at lower end of range.
“I think fund longs will stay with corn, until we get crop planted. If the crop gets off to a decent start then look out below,” Connelly says.
Regarding soybeans, the action is frustrating the bear camp, because everyone playing it with long puts, Connelly says. “The soybean option volatility is at the low end of range around 19.5%. Guys who were long puts on this break were disappointed with their profits.  Hearing some dryness issues sneaking into the weather chatter in SA, could be too late. Meal is strong, looking for a big export sales # tomorrow,” Connelly says.

 

Mike

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At 10am:

According to EIA data, ethanol production averaged 978,000 barrels per day (b/d)—or 41.08 million gallons daily. That is down 1,000 b/d from the week before. The four-week average for ethanol production stood at 971,000 b/d for an annualized rate of 14.89 billion gallons.

Stocks of ethanol stood at 20.6 million barrels. That is a 1.2% increase from last week and the highest since December 2012.

Imports of ethanol were non-existent for the week.

Gasoline demand for the week averaged 378.9 million gallons daily, the highest of the year. Refiner/blender input of ethanol rose slightly to 842,000 b/d.

Expressed as a percentage of daily gasoline demand, daily ethanol production was 10.84%.

On the co-products side, ethanol producers were using 14.829 million bushels of corn to produce ethanol and 109,148 metric tons of livestock feed, 97,306 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 5.75 million pounds of corn distillers oil daily, according to the Renewable Fuels Association press release.

 

Mike

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At the open:

The March corn futures are trading 2 cents lower at $3.79 per bushel.
March soybean futures are trading 6 1/2 cents lower at $9.67.

 

March wheat futures are trading 6 3/4 cents lower to $5.12. The March soybean meal futures are trading $2.90 per short ton lower at $333.70. March soyoil futures are trading $0.38 lower at $30.79.

 

In the outside markets, the crude oil market is $0.63 lower per barrel, the U.S. Dollar is higher and the Dow Jones Industrials are 58 points higher.

 

Mike

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At 7:20am:

 

Early calls: Corn 1-2 cents lower, soybeans 2-4 cents lower, and wheat 4-6 cents lower.

 

Trackers:
Overnight grain, soybean markets = Trading lower.
Brent Crude Oil = $0.29 lower per barrel.
Dollar =Higher
Wall Street = Higher, as Apple beats earnings expectations and selling 9.0 miilion more iPhones than expected.

World Markets = Europe stocks were lower, Asia/Pacific stocks were higher.

 

 

 

More in a minute,

 

Mike

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11 Replies
Senior Contributor

Re: Floor Talk January 28

Good morning Mike,

 

I have more market-impacting news. After Goiás, I have news about losses in Bahia - another big soybean producing state in Brazil. A consultant told me that the dryness was not as severe as Goiás during January, but the losses may reach 15% to 20% of the overall production of western Bahia. So a revision of the latest USDA and Conab number might be on the way.

 

Anyone excited?

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Advisor

Re: Floor Talk January 28

Hey Luis,

 

Am I correct that this would be nearer the coffee regions?

 

Yeah, I have some KC calls although know nothing whatsover about the business, just following the chart.

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Veteran Advisor

Re: Floor Talk January 28

The trading range for soybeans has been tight.  Not a lot of breakout prices either up or down.

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Senior Contributor

Re: Floor Talk January 28

You are right, hardnox.

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Veteran Advisor

Re: Floor Talk January 28

hardnox,

 

To your point. For those wondering, here is the state ranking of soybean production, in Brazil:

 

1. Mato Grosso           (29%)

2. Parana                    (19%)

3. Rio Grande do Sul  (14%)

4. Goias                       (11%)

5. Mato Grosso do Sul (7%)

6. Bahia                        (4%)

7. Minas Gerais            (4%)

8. Sao Paulo                 (2%)

9. Maranhao                 (2%)

10. Tocantins                (2%)

11. Santa Catarina        (2%)

12. Piaui                        (2%)

13. Other                       (1%)

 

I hope this helps.

 

Mike

 

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Veteran Advisor

Re: Floor Talk January 28

Hi Luis,

 

--information // news seems to be really hush - shhhh out of MG - the weather over there's been less than ideal for pod filling.

 

are you close enough to hear the whispers from farmers of possible reductions in MG.?

 

thank you!

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Honored Advisor

Re: Floor Talk January 28

To answer Luis........no one appears to be excited marketwise.   The USDA will be very, very slow on making changes to their prediction of South American crops.   The traders treat all USDA predictions as the only game in town. It will take much more than a few reports of lower yields in Brazil to get their attention.  But.....by all means, please keep trying.

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Senior Contributor

Re: Floor Talk January 28

The weather in Mato Grosso has alterned between "open sky" days and rainy days. The same can be said about Paraná, the second grain producing state in Brazil. So far so good. These interruptions of the early harvest would benefit the crop development, but if the rains continue throughout Feb.,  then the season would not be so bright. I might bring a full story on Brazil's weather this week.

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Veteran Advisor

Re: Floor Talk January 28

thanks --

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