Floor Talk January 29
After the close:
On Friday, commodity funds bought 11,000 corn contracts, 9,000 soybean contracts. End-of-month buying or do you think the funds really believe a bottom is in?
--Taiwan is looking to buy 40,000-65,0000 tons of corn from either the U.S., Brazil, Argentina, or South Africa. This was released Friday.
At the close:
At the close, the March corn futures settled 6 1/2 cents higher at $3.72. March soybean futures ended 14 1/2 cents higher at $8.82. March wheat futures finished 7 cents higher at $4.79 1/4. March soymeal futures closed $5.50 per short ton higher at $272.40. March soyoil futures settled $0.19 higher at $30.88. In the outside markets, the Brent Crude oil market is $0.45 higher per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 313 higher.
Dustin Johnson, EHedger LLC grain analyst, says that fund liquidation of short positions pushed up the markets.
“I don't know anyone that has a good answer for today's price action, other than that it is the last day of the month and the funds are covering. It may have something to do with the Bank of Japan’s announcement, overnight, cutting its rate that caused the funds to liquidate from the uncertainty, but we can't be sure. The one thing we are confident of is that it is fund liquidation, just not sure why.”
Johnson adds, “Regarding the Bank of Japan. Their rate cut to negative 0.1% caused a currency uproar last night, which sent the US Dollar Index sharply higher as the Yen and Euro fell apart. While that would normally be negative for dollar-denominated assets like CBOT grain futures, it may have actually caused some funds to exit. They have been very short corn, so liquidation has been positive.”
At mid-session, the March corn futures are trading 4 cents higher at $3.69. March soybean futures are 7 cents higher at $8.74. March wheat futures are trading 3 1/4 cents higher at $4.75. March soymeal futures are $4.60 per short ton higher at $271.50. March soyoil futures are trading $0.15 lower at $30.54. In the outside markets, the Brent Crude oil market is $0.51 lower per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 262 higher.
Also, China's Lunar New Year approaches. Traditionally, this means less buying of U.S. soybean purchases. We'll see how the market handles this holiday, this year.
News reports Friday indicate that Russia will not change its wheat export tax rules. Maybe a change on February 3, but nothing to happen for now. Let's see what the trade thinks, as we watch the wheat market start lower but now have turned 4¢ higher.
The Baltic Index, covering rates for ships carrying commodities such as grains, has hit a record low at 317 points Friday. It has dropped 10 points this week.
So let's see, world buyers can pick up real cheap U.S. commodities and have them shipped on a panamex at a recoerd-low price. What is the problem then? Where's the demand?
At the open:
At the open, the March corn futures are trading 1 cent higher at $3.66. March soybean futures are 3 3/4 cents higher at $8.71. March wheat futures are trading 1/2 of a cent lower at $4.71. March soymeal futures are $1.80 per short ton higher at $268.70. March soyoil futures are trading $0.03 lower at $30.66. In the outside markets, the Brent Crude oil market is $0.49 higher per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 129 higher.
Corn, beans and wheat all were little changed overnight as the market struggles to find direction. Investors are afraid of the big net-short positions but see little in the way of bullish news coming anytime soon.
Wheat 1-2 lower, corn 1-2 lower and soybeans 2-4 lower.
Overnight wheat, corn and beans unchanged.
Brent Crude Oil = 0.1% lower.
West Texas Intermediate Crude Oil = 0.3% lower.
Dollar = Up 0.5%.
Wall Street = Stock futures rise overnight as Bank of Japan boosts stimulus.
World Markets = Global stocks also improve on BOJ move.
Re: Floor Talk January 29
This is Marketeye. The cancellation was real. Soybeans still may finish the month higher, for the first time since September. Not much of a consolation, but something to nibble on.
Re: Floor Talk January 29
Brazil Harvest Update:
From Successful Farming-Brasil sfagro.com.br editors, it looks like the latest on soybean harvest is that activity is being delayed.
As of Friday:
In Mato Grosso, the harvest reached 10.3% of the total area (until today, 29/01). The delay is 2.1 percentage points compared to the previous harvest.
Because of this, the cotton planting for the second crop is also delayed (95.900 hectares is the delay). Also the “milho safrinha” can be late. In Mato Grosso do Sul, the harvest of soybean is around 2% of the area. In Goiás, the harvest will start later. The event of the "official opening of the harvest" was today in Goiás.
Will this support next week's soybean market? What do you think?