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Veteran Advisor

Floor Talk July 14

At the close:

At the close, the Sept. corn futures settled 12 1/2 cents lower at $4.28 1/4, Dec corn futures finished 13 cents lower $4.38 3/4.

Aug. soybean futures ended 4 cents lower at $10.33. Nov. soybean futures finished 3 1/2 cents lower at $10.25.

Sept. wheat futures closed 4 3/4 cents lower at $5.71.

Aug. soymeal futures settled $0.50 per short ton higher at $357.20. Aug. soyoil futures closed $0.34 lower at $32.40. 

In the outside markets, the Brent Crude oil market is $0.12 higher per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 79 points higher.

Mike

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At mid-day:

At mid-day, the Sept. corn futures are trading 8 3/4 cents lower at $4.32, Dec corn futures are 9 1/2 cents lower $4.42. 

Aug. soybean futures are trading 1 1/2 cents lower at $10.36. Nov. soybean futures are trading 3/4 cents lower at $10.27 3/4.

Sept. wheat futures are 4 1/4 cents lower at $5.71 1/2.

Aug. soymeal futures are trading $2.10 per short ton higher at $358.80. Aug. soyoil futures are trading $0.30 lower at $32.44. 

In the outside markets, the Brent Crude oil market is $0.38 higher per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 56 points higher.

Matt Pierce, Futures International LLC, CME Group floor trader, says the grain markets are overbought.
“Over values on corn, with direct impact from equites and the U.S. Dollar. Many were expecting a break in corn ratings which they did not get,” Pierce says.
Regarding the weak wheat market, there are problems, he says. “Wheat is a mess. KC-CHI at multi-year lows. it’s a bloodbath trade. I've heard of commercials moving to KC basis, forcing futures lower,” Pierce says.
Pierce adds, “Soybeans have a story. Conditions dropping week by week with more rain in the eastern Corn Belt. I'm not bullish, but remain cautious of beans.”
For the rest of the growing season, the market is eyeing a battle between west and east this year. “If the east dries out at all, corn will recover quickly. Beans are going to be the story moving forward,” Pierce says.
Meanwhile, Dustin Johnson, EHedger LLC grain analyst, doesn’t believe the market is overvalued.
“I wouldn't go as far to say that the market is overvalued.  I think the market was a little too quick to mark the crop as made just a few weeks ago,and now again I think there have been many that are too quick to write down substantial yield losses,” Johnson says. 
Johnson adds, “There is no doubt that we have had some problem areas, however, the crop ratings are not pointing to a disaster.  Corn's poor to very poor rating is only 9%.  There are a whole lot more soybean acres and yield in question which makes me think that crop is more susceptible to rallies and volatility.”
Corn, however, did not have a planting problem and the entire debate is around yield, Johnson says. 
“In wet years, we can see damage, but not nearly as much as those years when we are hot and dry through pollination.  We think this rally is a gift for producers and a selling opportunity,” Johnson says.  The December $5.00 calls are a cheap way to have a built in stop loss for the year, in case the damage is really as bad as some are saying.”

Mike

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At the open:

At the open, the Sept. corn futures are trading 4 cents lower at $4.36, Dec corn futures are 4 cents lower $4.47. 

Aug. soybean futures are trading 5 cents higher at $10.42. Nov. soybean futures are trading 6 cents higher at $10.34.

Sept. wheat futures are 1/2 of a cent higher at $5.76.

Aug. soymeal futures are trading $2.60 per short ton higher at $359.40. Aug. soyoil futures are trading $0.05 lower at $32.68. 

In the outside markets, the Brent Crude oil market is $0.20 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 9 points lower.

Mike

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At 8:15am:

A reminder: The July futures contracts expire today. Lately, the trade volume has been heavy. The rolling from July to Sep contracts has been a popular move. There is a sense that the recent rallies could begin to fade, if ideal weather sets in for the rest of the month for corn and improved weather for soybeans.

 

Mike

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At 7:05am:

 

Early calls: Corn 1-2 cents lower, soybeans 4-5 cents higher, and wheat mixed.

 

Trackers:
Overnight grain, soybean markets = Trading mixed.
Brent Crude Oil = $0.76 lower.
Dollar =Lower.  
Wall Street = Seen unchanged, with more focus on earnings season and data, less on Greece.

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

 

 

 

More in a minute,

 

Mike

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