Floor Talk June 23

[marketeye]

At 10:55am:

Interesting note of the day: Iowa and Illinois corn production, combined, is expected to make up 33% of the nation's total corn output in 2014. These two states have had as high as a 38% of the total production share in the early 2001-02. That is pretty significant, when you let that digest a bit. Don't you think?

Mike

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After the close:

USDA Crop Progress Report shows corn good/excellent rating dropping to 74% from 76% last week. For soybeans, the good/excellent rating fell to 72% from 73% last week.

See the full report here

What do you think, not a real big surprise for tonight's market?

Mike

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Here's a fundamental preview of the USDA Acreage Report. It's provided by The HighTower Report

What say you?

Mike

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At the close:

The July corn futures contract closed 8 3/4 cents lower at $4.44.

The Dec. corn futures settled 9 1/2 cents lower at $4.42.

The July soybean futures contract ended 9 cents higher at $14.24.

The Nov. soybean futures closed 2 1/2 cents higher at $12.33.

July wheat futures finished 5 1/2 cents lower at $5.79.

The July soymeal futures contract settled $3.40 per short ton lower at $455.80. The July soyoil futures closed $0.55 higher at $40.68.

In the outside markets, the NYMEX Brent crude oil is $0.63 per barrel lower, the dollar is lower and the Dow Jones Industrials are 64 points lower.

One analyst says, "USDA's Export Inspection Report Monday showed nothing. For the soybean market—didn’t really give back any gains.  Ok, maybe the new crop, but even at this time in the summer, the market is still discussing potential tightness in the old crop versus the potential larger new crop supply.  After the last 2-3 weeks of decline in the July beans, the market seems to be steadying itself.  New crop bean prices still have some risk premium in them which is understandable due to the soybean plant determining yield in the August timeframe.  In addition, there are enough new crop sales at these recent prices to support the market.
Long term wetter forecast--?????  I am happy that the heaviest rains will be falling in a different area, versus last week’s northern Iowa and southern Minnesota.  Isn’t this better than the rain shutting off like last year?"

Mike

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At mid-session:

The July corn futures contract is trading 8 1/2 cents lower at $4.44.

The Dec. corn futures are trading 8 3/4 cents lower at $4.43.

The July soybean futures contract is 4 3/4 cents lower at $14.11.

The Nov. soybean futures are trading 4 cents lower at $12.27.

July wheat futures are 5 cents lower at $5.80.

The July soymeal futures contract is trading $5.20 per short ton lower at $454.00. The July soyoil futures are trading $0.39 higher at $40.52.

In the outside markets, the NYMEX Brent crude oil is $0.60 per barrel lower, the dollar is higher and the Dow Jones Industrials are 40 points lower.

Mike

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At 10am:

Soybeans are giving back gains, while corn and wheat are already in negative territory.

If you missed it, Friday, the Committment of Traders Report showed managed money traders dropping 8,500 net corn contracts, for the week ending Tuesday, June 17. Soybean contracts dropped by 27,600, both amounts were essentially as expected. Producers and merchants added 13,000 net corn and nearly 40,000 net soy.

Mike

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At the open:

The July corn futures contract is trading 3 cents lower at $4.50.

The Dec. corn futures are trading 2 1/4 cents lower at $4.49.

The July soybean futures contract is 12 1/2 cents higher at $14.28.

The Nov. soybean futures are trading 8 cents higher at $12.39.

July wheat futures are 1/2 of a cent higher at $5.85.

The July soymeal futures contract is trading $1.60 per short ton higher at $460.80. The July soyoil futures are trading $0.49 higher at $40.62.


In the outside markets, the NYMEX Brent crude oil is $0.28 per barrel lower, the dollar is lower and the Dow Jones Industrials are 49 points lower.

Mike

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At 7:45am:

Early calls: Corn is seen 2-4 cents higher, soybeans 14-16 cents higher, and wheat 3-5 cents higher.

Trackers:
Overnight grain, soybean markets=Trading higher.

Brent Crude Oil=$0.08 per barrel lower.
Dollar= Lower.

Wall Street=Seen slightly higher.

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

More in a minute,

Mike

[Hobbyfarmer]

Add Nebraska's production in there and then it takes every other state except Maryland to make up the other half.

[timetippingpt]

Nice fundamental report from Hightower, BUT, the option strategys are just stupid if you are a producer. Odds are beans decline hard by harvest and they want you to sell puts to pay for stuff? Plus the complexity and multiple positions are nearly impossible to manage. Instead of making one decision right, you have to make multiple decisions right. Great for commissions, terrible for producers. jme  (just my experience)

If you do the math, buying deep in the money puts is by far the best strategy, especially in a year after a short crop. Plus in beans it is still not too late. Or, you could just straight sell beans and use a stop above november contract highs which have very, very low odds of being broken. jmo

[c-x-1]

watch those comm - they are extremely net long-soy-have eclipsed their 2006 length when price was below 7 + wkly, monthly charts are still in up-trend+remember USDA said crop was NOT short last yr. despite no rain for 45 days in Q/U -43 bpa when we thought 37-38 would be a trick-i believe the feds just helped trend with the cook-booking.

[timetippingpt]

So CX I must be missing something. Commercials are short 282k contracts and long 212k contracts, making them still net short 70K contracts or 350,000,000 bushels, with a carryout of only 120mil. Yes, most of the hedges might be in the new crop options, but it still is a net short position. I am hoping for a squeeze in the old crop so we can sell into hard.

[c-x-1]

might be, time...I should have been more clear - it's their RELATIVE length - or it's the least net short I've ever seen in recent yrs...that has my attn...and as you say = (-)71,797 CIT

last Aug price lows - their top (if you will) was about (-)78k - they hit (-)113k in spring and about (-)123k in late Jan/early Feb 2013

they never got less short than about (-)175k in 2012 after fall selloff. Were (-)350k before $18 highs

peak before Dec 2011 low price = 1100  was (-)110k or so.

2010 - they hit (-)80k twice - (2/9,3/16) when price was 950-1000 - before rally to 1450 cents that fall.

...and as you refer to, OI in new crop = almost 3X that of last 3 mos. of old....so, something could be a brewing as they say, more substantial than a moderate sqeeze in old ???