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Veteran Advisor

Floor Talk, June 11, 2020 (Report Day)

At the close:

At the close, the July corn futures finished 3 1/2¢ higher at $3.29 3/4. Dec. corn futures ended 2 1/4¢ higher at $3.43 3/4.

July soybean futures settled 1/2¢ higher at $8.66. November soybean futures closed 1/4¢ lower at $8.76 3/4.

July wheat futures closed 7¢ lower at $4.99.

July soymeal futures ended $0.90 per short ton higher at $289.70.

 July soy oil futures closed 0.50 cent lower at 27.50¢ per pound.

In the outside markets, the NYMEX crude oil market is $3.68 per barrel lower at $35.92. The U.S. dollar is higher, and the Dow Jones Industrials are 1,682 points lower.



At 11:15am:




Full story: USDA prints orderly estimates for U.S. corn and soybean supplies

Trade Reaction:

--Sal Gilbertie, Teucrium Trading, says that today’s WASDE report has China's impact coming through it.

“The highlight of this report is the influence of China on the global grain markets, notably that China is expected to take almost all of the world’s soybean surplus with a projected increase in Chinese soybean imports of over five percent versus last year. In addition, China is currently expected to hold over half (51%) of global wheat inventories. Weather and the approaching corn pollination season will determine price direction from this point forward,” Gilbertie says.

--Jason Ward, Northstar Commodity, says that there is nothing too earth-shaking in the report.

"The 2019 U.S. yield/harvested acres came down for corn, which got us 46 million bushels less production. The biggest change was 10 bu/acre reduction in the corn yield in North Dakota to 131 bu/acre. This entire production decline was more than offset by a 50 million bushel reduction in corn used for ethanol which was also needed based on current usage pace. But, with more plants coming online each week, we should be able to avoid further reductions," Ward says.

The disappointment in the report today is the U.S. soybean export target for old crop which continues to be cut, 100 million bushels last month and 25 million bushels today, Ward says.

"This gives the market lower confidence in U.S./China export business in the old crop space. With the U.S. Dollar testing 2-month lows and the Brazilian Real at 2-month highs, there were many in the trade expecting the export target to be unchanged, or possibly even be lowered," Ward says.

Ward added, "The math works like this, we need to average 3.5 mil/bu/week of old crop soybean sales to reach the annual target. The shipments need to increase, or these sales will simply be rolled over to new crop. But, as long as they are not cancelled larger sales in the next 13 weeks of the marketing year will move over to new crop and result in lower ending stocks."

The other surprise is that USDA continues to use 124.0 million metric tons for Brazil’s soybean production, higher than nearly every private sector estimate and Brazil’s own government estimate, Ward says.
"This kept today's estimate of world soybean ending stocks from falling further, while the 1 mmt. cut in Argentine soy production is right in-line with private estimates. So, USDA looks high on Brazil production according to industry experts, but they have Argentina very close, and we think they are a little too bearish to U.S. exports of soybeans for the old crop," Ward says.



At 8:45am:



In early trading, the July corn futures are unchanged at $3.26. Dec. corn futures are 1/2¢ lower at $3.41.

July soybean futures are 1/2¢ higher at $8.66. November soybean futures are 1/4¢ lower at $8.76 3/4.

July wheat futures are 2 1/4¢ lower at $5.04.

July soymeal futures are $0.20 per short ton lower at $288.60.

 July soy oil futures are 0.25 cent lower at 27.75¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.89 per barrel lower at $36.71. The U.S. dollar is higher, and the Dow Jones Industrials are 841 points lower.

On Thursday, private exporters reported to the USDA export sales of 720,000 metric tons of soybeans for delivery to China. Of the total, 63,000 metric tons is for delivery during the 2019/2020 marketing year and 657,000 metric tons is for delivery during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures.

Corn= 686,600 metric tons vs. the trade’s expectations of between 5000,000-800,000 mt.

Soybeans= 2.21 million metric tons. vs. trade’s expectations of 700,000-1.7mmt.

Wheat= 270,400 mt.

Soybean meal= 226,900 mt.

Al Kluis, Kluis Advisors, says that investors will eye today's USDA reports.

"The funds are estimated to be quietly long soybeans, heavily short corn, near record short spring wheat, and short both KC and CBOT wheat. Will the USDA report provide any data to sway fund managers to change their positions? After the report, weather will quickly become the hot button topic. Currently, there is not a weather threat strong enough to concern the funds," Kluis told customers in a daily note.


What say you?



0 Kudos
7 Replies
Senior Contributor

Re: Floor Talk, June 11, 2020 (Report Day)

Oh gee what a shock the idiot traders ignore sales.

0 Kudos
Honored Advisor


Warning,  At least one month old data available as new news in 27 minutes....

0 Kudos
Senior Advisor

Re: China soybean sales....

It would be nice to know a little bit more about that 637,000 MT of next market year soybean sales to China.  Are they for the government reserves or private dealers?  It seems to me to be a little earlier than normal for next year's sales.  Usually, they start buying in August.   Are these early sales due to the possible instability in Brazil or are the Chinese just hedging the current price ahead of any weather rally.?

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Veteran Advisor

They wil keep

Buying big. 

They China will own All the USA beans and expected 2020 production by Sept 1st.

The up is just beginning. 


0 Kudos

Re: They wil keep

So, 206 countries in the world and these fellas are this reliant on China?  Come on where are the sales expand people.  What’s the problem now they’re buying just not enough?  Ohh just like all of history with US trade.  EU, Egypt, Israel, we know were selling just not comparable to China sales.  Swallow your pride and start doing some business.  They need corn we have it done deal, just sell and progress forward.

0 Kudos
Honored Advisor

Re: They wil keep

Usda misses sales by at least 1/2 million bushels and still talks it down.  Gotta love an election year.  

Honored Advisor

Re: They wil keep

So.......USDA lowers acres and yields from last years’ crops.   Just how many dollars did they keep away from the U.S. farmer by pulling those original numbers out of thin air?

The traders treat their numbers like gospel when they are nothing more than an optimistic guess. 

The predictions of these pie in the sky numbers help everyone except for the original producers.