Floor Talk June 17

[marketeye]

NOTICE: Fed leaves interest rates unchanged.

Alan Brugler, President Brugler Marketing & Management LLC, tells Agriculture.com his take on the Federal Reserve's decision on interest rates Wednesday.

"Fed did as expected in leaving rates alone following the June meeting. We continue in a slow growth environment (although I think ultimately we'll see upward GDP revisions).

Keep in mind that the Fed quit "easing" a while ago. They are just taking their time about starting to tighten. Any easing effects in terms of creating inflation in commodity prices are likely gone. They appear to be waiting for inflation to appear organically via a tightening labor market and eventual higher wages.

Farmland prices have been abetted by low interest rates but the bigger driver is farm income and operating margins. Both of those are being squeezed if average or better crops are seen in 2015. Thus, the default mode would be for further pressure on farmland values due to limits on ROI. Rising rates would put additional pressure on incomes due to increased interest cost/debt expense and would presumably add an additional bearish nudge to farmland. The delay today defers any such impact.

Higher rates would in theory reduce the leverage of futures traders, but there is not much speculative froth in commodity markets right now anyway. A slow increase in rates would likely have minimal impact on speculative activity in the markets. "

Mike

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At the close:

At the close, the July corn futures settled 5 1/4 cents higher at $3.59 1/4 per bushel. The Dec corn futures finished 5 cents higher at $3.75 per bushel.
July soybean futures finished 11 1/2 cents higher at $9.69. Nov. soybean futures closed 12 1/4 cents higher at $9.39 3/4.

July wheat futures finished 2 1/2 cents higher at $4.91 1/4.

July soymeal futures ended $2.90 per short ton higher at $323.70. July soyoil futures closed $0.05 lower at $32.85. 

In the outside markets, the Brent Crude oil market is $0.54 lower per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 88 points higher.

Mike

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At mid-session:

At mid-session, the July corn futures are trading 4 3/4 cents higher at $3.58 3/4 per bushel. The Dec corn futures are 4 3/4 cents higher at $3.74 per bushel.
July soybean futures are trading 9 cents higher at $9.66. Nov. soybean futures are trading 9 cents higher at $9.36 3/4.

July wheat futures 5 1/2 cents higher at $4.94.

July soymeal futures are trading $4.00 per short ton higher at $324.80. July soyoil futures are trading $0.13 lower at $32.77. 

In the outside markets, the Brent Crude oil market is $0.08 higher per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 20 points higher.

Jacob Burks, WedBush Futures analyst, says these are the types of volatile moves producers need. "I’m not sure how much how real rally we can get from unplanted acres but the scare of it has generated short covering from the funds and that’s more important than anything. This rally could go further than it should just because the liquidation of short positions from outside money. Buy put options on this rally in case we don’t get summer weather problems."

Mike

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At 10:50am:

The CME Group wants you to know this about the wheat options activity.

CBOT Soft Red Winter (SRW) Wheat options traded a record 81,061 contracts, yesterday (6/16/15), surpassing the previous record of 79,096 options contracts traded on 5/14/2015.

Mike

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At the open:

At the open, the July corn futures are trading 3 cents higher at $3.57 per bushel. The Dec corn futures are 2 cents higher at $3.72 per bushel.
July soybean futures are trading 6 cents higher at $9.63. Nov. soybean futures are trading 6 cents higher at $9.34.

July wheat futures 6 cents higher at $4.95.

July soymeal futures are trading $0.60 per short ton higher at $321.40. July soyoil futures are trading $0.05 higher at $32.95. 

In the outside markets, the Brent Crude oil market is $1.18 higher per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 54 points higher.

Mike

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At 7:00am:

Early calls: Corn 4-6 cents higher, soybeans 12-14 cents higher, and wheat 8-10 cents higher.

Trackers:
Overnight grain, soybean markets = Trading higher.
Brent Crude Oil = $1.37 higher.
Dollar =Lower.  
Wall Street = Seen higher, investors turn focus away from Greece's financial crisis to the Fed Reserve meetings.

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

More in a minute,

Mike

[wrightcattle]

i think the higher / lower usd bse will shed itself of it's supposed importance regarding foods produced, thus prices to agri producers.

folks did not quit eating yesterday,  regardless of currency.