Floor Talk June 24

[marketeye]

At the close:

At the close, the July corn futures settled 1 cent lower at $3.66 1/2 per bushel. The Dec corn futures finished 3/4 of a cent lower at $3.80 1/2 per bushel. 

July soybean futures closed 5 3/4 cents lower at $9.81 3/4. Nov. soybean futures ended 4 3/4 cents lower at $9.56.

July wheat futures settled 3 1/2 cents lower at $5.18.

July soymeal futures closed $3.90 per short ton lower at $328.00. July soyoil futures finished $0.45 higher at $33.27.  

In the outside markets, the Brent Crude oil market is $0.95 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 149 points lower.

Mike

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At mid-day:

At mid-day, the July corn futures are trading 3 cents higher at $3.70 per bushel. The Dec corn futures are 3 cents higher at $3.84 per bushel. 

July soybean futures are trading 2 1/2 cents higher at $9.90. Nov. soybean futures are trading 3 3/4 cents higher at $9.64.

July wheat futures 7 3/4 cents higher at $5.29.

July soymeal futures are trading $2.40 per short ton lower at $329.50. July soyoil futures are trading $0.54 higher at $33.36.  

In the outside markets, the Brent Crude oil market is $1.09 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 142 points lower.

Jack Scoville, PRICE Futures Group vice-president, says it’s still a weather market.
“We are still in a weather market and more rain is coming.  I think that this is what is going on as much as anything,” Scoville says. 
Plus, we have had the specs short for so long and they are getting out, he says. 
“Corn looks like it is trying to break through some real strong resistance and finally seems to be getting the job done, on fears that the corn crop won’t be all that good. Wheat is still scab and disease and slow harvest, and beans just having trouble with the $10.00 July area, got close yesterday and not as good today.  Lots of selling in July from South America and I suspect here, too, so that is keeping it down.”

Mike

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At the open:

At the open, the July corn futures are trading 2 cents lower at $3.65 per bushel. The Dec corn futures are 1 cent lower at $3.80 per bushel. 

July soybean futures are trading 4 cents lower at $9.83. Nov. soybean futures are trading 3 cents lower at $9.57.

July wheat futures 3 cents lower at $5.18.

July soymeal futures are trading $3.90 per short ton lower at $328.00. July soyoil futures are trading $0.44 higher at $33.26.  

In the outside markets, the Brent Crude oil market is $0.23 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 68 points lower.

Mike

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At 6:55am:

Early calls: Corn 2-4 cents lower, soybeans 5-7 cents lower, and wheat 2-4 cents lower.

Trackers:
Overnight grain, soybean markets = Trading lower.
Brent Crude Oil = $0.04 lower.
Dollar =Lower.  
Wall Street = Seen lower, investors eye Greece's bailout jitters.

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

More in a minute,

Mike

[roarintiger1]

The traders and end users appear to be taking the cautious approach to buying into the lower crop ratings and the strong potential for those ratings to drop further.  And, who could blame them?  They have a plentiful supply for now and are promised another record crop.   There are long lines and limited dumping hours at the local ethanol plant with a record number of bushels being turned into renewable fuel.   They are processing close to 30% more bushels per day than in the past.  And yet their basis, while a tad lower than it was a month ago, is NOT falling off the cliff.         Don't worry, be happy.   

[Mizzou_Tiger]

RT

Not sure what's going on in my backyard. We had a big crop last year. And end users have been playing games all spring thinking the bins will open up to make room for 2015 crop

Well 2015 crop in our immediate area isn't even planted in the case of beans. And most of the prevent plant corn acres in MOA will come out of this corner of the state

So all of a sudden the doors got welded shut and end users are having a really hard time getting grain in

Unposted bid for beans is close to $10.50 and they need em now

Corn is right at $4 and they are offering to come get it because they know guys aren't focused on hauling.

It's getting interesting locally and by next spring our basis could be quite explosive depending on board price.

Heck their new crop bids are pretty dang good basis wise too. They just aren't getting anyone to sell

We have been hauling in contracts off and on for two months and the longest line was a 15 minutes wait and more times than not its roll in and roll out without even setting the brakes

I'm sure other areas of the Midwest are moving more grain, but here we are usually a net user so a short crop really gets things interesting. And while we don't know the 2015 crop size locally it's pretty good chance it's quite average on corn and likely a disaster on beans at least bushel wise

Traders are being cautious. We know that close to 4M acres of beans will be PP. Question is off what number.

Skin the NAT avg to 42 on 80M harvested acres all of a sudden that cushion is gone. What's 80M harvested acres at 155 look like?

The interesting thing now is this. What's 2016 look like. If you look at 2013, 2014 and now 2015 one might say that we've had plenty of water. Law of averages says we are due for a dry one coming.

This is why I get so frustrated with the complacency of this market. 2B and 500M carry should be our goal and should be rewarded not punished.

[rayjenkins]

Mizzou.....sounds like very good BASIS opportunities in your area. Now, I understand quite well the natural reaction to lock the bin doors and expect big things.......but 70 over the July bean futures and 35 over the July corn contract is just screaming for a move cash and buy the board strategy......

I am sure it feels like there is no grain in the area....and little prospect for new crop production.....but over the course of time, grain will start to flow into the area and those basis levels will very likely equalize at values less than seen today...

pick that fruit!

[Mizzou_Tiger]

Ray we will likely do that on some bushels to make room as we have just about filled all the contracts

That said we are also likely going to put up another tin can

you are right that some grain will flow in but keep in mind most of SIA all of MO parts of EKS and SENE are a mess. That will stabilize basis even more

Funny part is when talking with grain buyers, they are clueless to the mess. You might not be but they are. They ask how things look and when u tell em no beans are planted and the corn isn't done and looks like hell there's crickets on the other end

[rayjenkins]

$3 cash corn in a farm bin is the best investment on the planet if you have 24-36 month time horizon

** as long as you are solid enough financially and emotionally not to get blown out at the bottom

sometimes you have to think "investment" instead of the price and short term prospects...

[ihtractortherap]

Ray,
How do you keep the corn in condition for that long ,keep it cold or warm it up

[illinifarmer]

3$ cash corn at 150 is only 450$ an acre! Guys up here in IL are at 350 to 400$ for rent alone. Sounds like somebody's a little out of date on production costs 4$ is only break even corn prices now days hello wake up!

[rayjenkins]

 I H ........keep the temp close to ambient and moisture at 14% or less

Illii----never said $3 corn was a good thing for you guys.....but if it happens, how are you going to take advantage of the situation......that is the real question....

[illinifarmer]

Anytime I get around 10 months even at 14% without flipping or rotating it around it molds? I understand your position on the investment side however 1980 March corn contracts traded 3.30$. So, you can clearly see the progress we all have made in 35 years it is a sad market anyway you look. Hell of an investment back then one would have thought as well. Tiger was spot on we "farmers" get punished or penalized for better production and sit back only to watch people getting rich off our success.