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Veteran Advisor

Floor Talk, June 13, 2019

At the close:

At the close, the July corn futures finished 12¢ higher at $4.42. Dec. corn futures ended 7 1/4¢ higher at $4.55 3/4.

July soybean futures finished 10¢ higher at $8.88. November soybean futures closed 9 3/4¢ higher at $9.15 1/4.

July wheat futures finished 9 1/4¢ higher at $5.35 1/2.



July soymeal futures closed $2.20 per short ton higher at $321.70.

 July soy oil futures settled $0.46 higher at 28.02¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.29 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 60 points higher.

Jack Scoville, PRICE Futures Group, agrees that the markets are underpinned by a weather market.

“USDA cut the U.S. corn area and will cut it more. We think so and so does Informa, the private analyst firm. The USDA’s U.S. average corn yield is fine, but basically right now we are looking at significantly reduced carry out for the coming year and the need to ration a little bit,” Scoville says.

Scoville adds, “The market is starting to note the wet beans and note the disease potential as well as the potential for reduced area. Funds buyers everywhere today. This is fun again! We can go above $5.00 in Dec corn futures, for sure, I think.”

Meanwhile, Mike North, Commodity Risk Management Group, says this week's bullish news is behind Thursday's rally

"Today is about WASDE report follow through and technical buying after old highs were violated," North says.

 

Mike

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At 1:15pm:

Informa, the private analyst firm, updated its 2019 acreage estimates, Thursday.

 

Corn= 84.8 million acres, down 5.0 million vs. USDA's June estimate

 

Soybean=  85.0 million, up 370,000 acres vs. USDA June.

 

What say you? Too high, too low, or just right?

 

Thanks,

 

Mike

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At midsession:

At midsession, the July corn futures are 8 3/4¢ higher at $4.38. Dec. corn futures are 4 1/4¢ higher at $4.52.

July soybean futures are 7 1/2¢ higher at $8.85. November soybean futures are 7¢ higher at $9.12 1/4.

July wheat futures are 3 1/4¢ higher at $5.29 1/2.



July soymeal futures are $2.30 per short ton higher at $321.80.

 July soy oil futures are $0.20 higher at 27.76¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.97 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 66 points higher.

 

Mike

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At 9:15am:

In early trading, the July corn futures are 9 1/4¢ higher at $4.39. Dec. corn futures are 5 1/2¢ higher at $4.54.

July soybean futures are 7¢ higher at $8.85. November soybean futures are 6 3/4¢ higher at $9.12 1/4.

July wheat futures are 6¢ higher at $5.32.



July soymeal futures are $3.00 per short ton higher at $322.50.

 July soy oil futures are $0.23 higher at 27.79¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.58 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 38 points higher.

Al Kluis, Kluis Advisors, says that investors are building in more risk premium into the markets.

“The seven-day precipitation amounts range from 1.5 inches up to 4 inches across most of Illinois, Indiana, and Ohio. As of Sunday, these states only had 49%, 42% and 32% of the soybean crop planted, respectively. At what point do the planters get parked for the season,” Kluis told customers in a daily note.

Kluis added, “The corn balance sheet is on the verge of becoming worrisome. We don’t need to see massive reductions in acreage and/or yield and we could still see the stocks-to-use ratio in the 5 to 7% range. The further we see the ratio fall under 10%, the more bullish traders will become.”

Private exporters reported to the U.S. Department of Agriculture export sales of 175,000 metric tons of corn for delivery to Mexico during the 2019/2020 marketing year.

The marketing year for corn began Sept. 1.

 

Mike

 

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4 Replies
Senior Contributor

Re: Floor Talk, June 13, 2019

Wasn't Curly telling us all to take advantage of the rally in corn a month ago and sell, sell , sell? 

Wonder how he spins that advice to paying customers now.

We used to have a local paid consultant that would also tip a few beverages and spew out free advice....saw him at a bar one January when corn had rallied strong all fall, and July bids were pretty good....he was saying it was like a rocket ready to go off...get ready for the really big move. I had sold most of what I had in my bins that same Friday, and just quietly nodded.

 

Saw the late great guy a few months later and bought him a drink....told him he had made me a lot of money with his advice.....He perked up, and said Really? Yeah I said, my dad always said that when the drunks in the bar are saying to do something, go home and do the opposite.

Corn had crashed right after that weekend...I think that Friday had been the high bid for the year, and the market never came back.

 

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Veteran Advisor

Re: Floor Talk, June 13, 2019

rsbs,

 

Interesting story. Sounds like the moral of the story is to go to the bar more often. Seriously, Al subscribes to scale up selling. So, at any given time of the year, you might catch him advising selling a portion of your old-crop or new-crop. If you think that he is always going to be  right, or that he's waiting to hit homeruns, you're wrong. He's working with what is in front of him, applying 40 years of grain trading experience, all while considering each customer's specific farm operations. That's what I can tell you.

Thanks,

 

Mike

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Senior Advisor

Re: Floor Talk, June 13, 2019

"The corn balance sheet is on the verge of becoming worrisome." 

Interesting choice of words. "Worrisome" it is not. Fantastic might be a better word. Funny....the data hasn't changed since May 20th when it was obvious planting was going to be late, but now..... $1 later is is "worrisome".  Smiley Surprised

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Senior Contributor

Re: Floor Talk, June 13, 2019

Marketeye, I don't even know the names of the local bars anymore, been happily married for a long time to a woman that wants to know where her husband is but I do agree that you can learn a lot in social settings.

And for the record, I agree that paid marketing advice is money well spent for people that have a hard time pulling the trigger themselves and need a professional to fill that need. One of the hardest things to do is to sell in a down market, and scale up selling helps you avoid having to sell when the rear view mirror is telling you that you missed the highs.

I had sell orders in for $4.50 December corn that I pulled before they hit after reading about what was going on around the corn belt and hearing anecdotal stories of bare Ohio etc. 

This bull market seems to have legs, and our local unit train coop already has pretty good summer 2020 basis bids....some end users, perhaps the smart ones, are getting their supplies of corn locked up.

I have no clue what the price of corn will end up being, but I remember back when $2 corn was what made everything work, and $3 corn was where the price would go to on shortages.

Now we are in a situation where the number is $4 corn to make things work and some multiple of that is where the price will go on a shortage, perceived or real.

I also am guilty of selling a lot of $3 corn, years out when it became a $5 corn market years ago.....that cost me a lot more money than not jumping all over $3.50 corn bids a month ago would have when the worst case scenario would have been $3.oo.

 

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