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Veteran Advisor

Floor Talk, July 25, 2019

At the close:

 

At the close, the Sep. corn futures finished 5 1/2¢ lower at $4.18 1/4. Dec. corn futures closed 3 1/4¢ lower at $4.27 1/2.

Aug. soybean futures closed 8 1/2¢ lower at $8.82 1/4. November soybean futures ended 8 1/2¢ lower at $8.99 3/4.

Sep. wheat futures settled 1 3/4¢ higher at $4.99 1/2.



December soymeal futures closed $3.00 per short ton lower at $309.80.

 December soy oil futures closed $0.01 lower at 28.79¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.10 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 149 points lower.

 

Mike

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At midsession:

 

At midsession, the Sep. corn futures are 1 1/2¢ lower at $4.22 1/4. Dec. corn futures are 1/2¢ higher at $4.31.

Aug. soybean futures are 5 1/2¢ lower at $8.85 1/4. November soybean futures are 5 1/4¢ lower at $9.03.

Sep. wheat futures are 6 3/4¢ higher at $5.04 1/2.



December soymeal futures are $2.60 per short ton lower at $310.00.

 December soy oil futures are $0.13 higher at 28.93¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.40 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 131 points lower.

Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that non-threatening weather and fund activity will drive the markets, nearterm.

“Markets are extremely quiet again, today. The extended 6-10 day forecast offers little threatening weather to most of the Corn Belt, with decent rainfall expected and normal temperatures. The longer range forecast does have a warmer and drier tone to it, but with the majority of the crop expected to be pollinated by then, the market does not yet feel that as threatening. The soybean market could see some support from long range forecasts should it be realized as many fields are expected to be flowering in that time frame,” O’Connell says.

She added, “Mild support has come into the soybean market, as trade talks with China are expected to advance with Lighthizer and Mnuchin traveling to China next week. Regarding the outside investors, there’s certainly room for the funds to add length to corn ahead of or after the Aug 12 report should they desire. Soybeans are likely going to struggle.”

Corn basis levels at Eastern processors have started to narrow a bit in many locations, she says. “Some ethanol plants were paying as much as +.70 at times. These crazy basis levels are something that even buyers have struggled to wrap their heads around. The general feeling is that their is ample supply of old crop in the farmers hands, but apparently he/she is incredibly bullish and not letting it go. Or, maybe it's not out there like we think. It's been an interesting cash trade this summer. Something that we are not used to for sure,” O’Connell says.

At 10am:

FYI: One of my sources just dropped a note to me about South America's corn exports.

He says, "Overnight, South American corn shipments hit a record high month-to-date of over 8 million tonnes. This is like exporting the entire KY and TN corn crops in one month."

 

Mike

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In early trading, the Sep. corn futures are 3/4¢ lower at $4.23 1/4. Dec. corn futures are 3/4¢ lower at $4.30.

Aug. soybean futures are 1 1/4¢ higher at $8.92 1/4. November soybean futures are 1 1/4¢ higher at $9.09 1/4.

Sep. wheat futures are 2¢ lower at $4.95.



December soymeal futures are $0.70 per short ton lower at $312.10.

 December soy oil futures are $0.18 higher at 28.98¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.67 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 25 points lower.

Al Kluis, Kluis Advisors, says that the investors will be eyeing wheat price action to get a read on corn.

“The wheat market is trying to put in a low and work its way higher. If the wheat market can move higher, then that will be very supportive to the corn market. .”

Kluis added, “What looked like a higher trade on Wednesday turned lower about midday. Positive talks about China and trade talks resumed along with a warmer forecast during pollination. This had us off to a decent start. For the most part the crop is progressing nicely. Until we start talking about early frost, this market will continue to find some selling on small rallies.”

Mike

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At 8:18am:

On Thursday, the USDA’s Weekly Export Sales Report favorable wheat figures.

Corn= 507,800 metric tons vs. the trade’s expectations of between 300,000-700,000 mmt.

Soybeans= 301,900 mt. vs. the trade’s expectations of between 250,000-550,000 mt.

Wheat= 659,700 mt. the trade’s expectations of between 200,000-400,000 mt.

Soybean meal= 227,300 mt. the trade’s expectations of between 110,000-400,000 mt.

 

Mike

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7 Replies
Esteemed Advisor

Re: Floor Talk, July 25, 2019

Ah Klueless strikes again, "for the most part, the crop is progressing nicely".... just brings a smile. Apparently, the crop condition ratings only count if they are good?   chuckle

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Esteemed Advisor

Re: Floor Talk, July 25, 2019

Does the corn in IN turning into a pineapple today at 83 degrees count as "progressing nicely"? Just wondering how out to lunch my mind has become. When friends from ND, all the way to OH, tell me the crop is progessing...nicely is not a word that is used. Struggling, hanging on, sort of growing, but nary a one uses the word "nicely". Lots of beans not grown together in 15" rows all across the midwest, on 7/25 that is not "Nicely"....

Then I pull up the 7 day forecasted rainfall totals and I see that 75% of the belt gets less than an inch, 50% less than a half, and then heat to build in during August. Yep, record crop on the way.

My point is....when do the algo-geeks in chicago, and the fellow Klueless talking heads, realize the reality. Even the crop conditions scores (which normally overstate the crop) can't recover, and yet the experts just ignore them this time around? Anyway, just amazing the complacency. This is exactly how you have a 1983 type yield (for all but a few sweet spots in NE, IA, and MN.). A few sweet spots won't carry the average this time around.

And Brit's "non-threatening weather" comment is just worthy of being ignored as wishful thinking.

Honored Advisor

Re: Floor Talk, July 25, 2019

It may be easy to ignore, but the economics are also driving the corn crop reductions this year (and maybe the last two crop years).  So many "Subsidy crashers" have jumped on the ethanol driven corn crop for an increased share .....(seed, chemical, fertilizer, technology, and rent---- corporations and investors and advisers and exporters.)  for their share of the big crop that the realities for producers are "top yields or else". --------------- This year when top yield potential went away early, acres disappeared nearly from the start in areas where there was choice.  At some point there is always a choice other than shelled corn.   Depleted irrigation water supplies considered many acres went to lower cost crops on the fringe from the start.  This meant a shift to bean acres for a while.  But then late plant pushed on in the corn belt until, in the struggle to get the corn in, bean acres were lost or planted so late that it won't matter.  Both crops are probably in the 80+m acre range of actual planting....

There are some other  telltale signs to think about.......... wheat is one of them--- good out west --not good in the wheat belt but either way is facing one of the lowest acres planted numbers in decades.  Wheat feeding reports went nearly unnoticed.  But in june or early july we heard from livestock feeders that wheat rations were being planned or used.   That hasn't happened since the ramp up in ethanol production.  Not since 2009 and prior to the drought.  And the loss of that market depressed wheat prices with low quality carryover.   It was a common practice in the Sw  prior to ethanol, to use lower protein wheat in cattle rations to cushion the hunt for carryover corn and add some protein.   and we have come to expect wheat as cheap as corn.   We should have noticed........ lower carry over corn than expected is forcing wheat feeding.  Corn may have been Harder to get after the floods  and those corn belt states don't ship it south like they used to.   

Usda and Al (and many others) keep talking a 90+m acre corn crop with a little PP and a little late plant and a little quality loss......... but still coming to surprise us....    It's far more likely to be an 80+m acre potential crop with PP not factored in yet, and 30-40% late plant(at least 3 weeks), heat stressed and 15% low fertility  factor.  (More likely than ASF lowering china's demand for imports.)   More likely that record yields every year>>>>>>

Senior Contributor

Re: Floor Talk, July 25, 2019

Will USDA's resurvey August report be a few less acres because of PP and a higher yield because  the best acres got planted?

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Honored Advisor

Re: Floor Talk, July 25, 2019

Most corn here is full tassel and beans are about covering 30" rows.  You figure needing 60 days after tassel to black layer and normal freeze of Oct 1-10, we`ll easily be okay, no curveballs and knock on wood, we`re probably a week or 2 behind.   However, it isn`t hard to find or a very long drive and prevent plant field or a "insurance field" and across the road a 250 bushel potential field, so it`ll be January to get a total handle on the crop.   

 

Pro Farmer tour is going to be very interesting, IMO this year they should sample twice as many fields to better paint the picture.  I think when combines roll in October, Twitter will explode "better than expected" but as we get further into harvest, the yield reports will quickly peter out.  If you`re a user of grains, I`d suggest sidling up to the betting window to avoid the coming stampede. 

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Honored Advisor

Re: Floor Talk, July 25, 2019

BA there is a big difference between fully tassled and "I see a few tassels".  I am looking a long way south of you but a lot more up hill.  We average first hard freeze arount 10/15....  There are a lot of fields showing tassels maybe 60%.  But fully tassled and evenly exerted (close to polin shed)....... now were talking 30% of what I see. And tomorrows the 27th of July....  Your 60 day black layer is after pollination.  That will take another 2 weeks on the best half of what I see.  maybe not that good.

 So we got 60 days to wrap this up (after August 10th for the best half of the crop.... assuming August is not cloudy and wet (like it has been the last two years).  The other half will have lots of casualties and still be standing there when the snow flies.  (in your area maybe, out here it will be a casualty of the wind by then.)

The planted acres are down, by choice and PP (and standing water).  But the last 20-25% of the corn in our area will look for a silage pit because it is irratically growing between 4 ft high to 7 ft and is still dreaming about being big enough to tassle.... or worse has a few tassels at 5 ft with plenty of water and heat to push it --- like a 14 year old with a draft notice.

I know that sounds like market pushing..... but I have no faith in our formerly competitive "markets"  ---- I figure come next April several someones will be looking for grain long after it has been ripped out of the producers hands.  That is when markets move when the commercials own the grain. 

Honored Advisor

Re: Floor Talk, July 25, 2019

Thanks for the report, SW.  Around here there was a big reward for getting planted early, even if conditions were far from perfect, since it stayed wet.  I planted corn "in the dust" but still you can see digger tracks in parts of fields.  It seemed "moisture worked upward" towards evenings, making it not as fit as you`d think.  But it does look nice, an extra 20lbs of N for insurance and I don`t know but spraying 32% after planting and letting the rain push it in and using Nutrisphere (something I hadn`t been a believer in) seemed to be all good calculated decisions this year.  I think if a guy incorporated N before planting the shallow roots wouldn`t have reached a lot of it before it leeched.