Floor Talk, June 3, 2020

[marketeye]

At midsession:

At midsession, the July corn futures are 1 1/2¢ lower at $3.22 3/4. Dec. corn futures are 3/4¢ lower at $3.37 1/4.

July soybean futures are 6¢ higher at $8.56. November soybean futures are 5 1/2¢ higher at $8.66.

July wheat futures are 3¢ higher at $5.11.


July soymeal futures are $1.10 per short ton higher at $284.80.

July soy oil futures are 0.11 cent lower at 27.83¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.31 per barrel lower at $36.54 per barrel. The U.S. dollar is lower, and the Dow Jones Industrials are 414 points higher.

Mike

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At 11am:

SelectiveHedging sent out a note Wednesday that highlights the latest yield estimates and its ultimate impact on demand. What do you think?

"Barchart released a yield estimate on 6/02 for the 2020 corn crop.  National yield was pegged at 172.4 bu/ac vs the preliminary USDA estimate on 5/10 of 178.5 bu/ac. The release did not include estimates for beginning stocks or acres.

So, what impact would this adjustment have?

 
The most obvious is a decrease of 548 m.bu. of production from 15,995 m.bu. to 15,447 and total supply from 18,118 m.bu. to 17,570, assuming beginning stocks, acres, and imports remain constant. That does not mean that ending stocks would decrease by a similar amount because quantity demanded goes down when price goes up. Based on the Selective Hedging Supply and Demand Model, the projected average farm price would increase by $0.20/bu. If demand remains constant, there would be only a nominal impact on ending stocks.  Please note the difference between quantity demanded moving up and down the demand curve versus the demand curve moving right or left.  A change in supply does not, in itself, move the demand curve. 

Mike

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At 8:45am:

In early trading, the July corn futures are 1¢ lower at $3.22 3/4. Dec. corn futures are 3/4¢ lower at $3.37 1/4.

July soybean futures are 5 1/4¢ higher at $8.55 3/4. November soybean futures are 5 1/2¢ higher at $8.66.

July wheat futures are 3¢ higher at $5.11.



July soymeal futures are $0.50 per short ton higher at $284.20.

July soy oil futures are 0.13 cent higher at 28.07¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.04 per barrel higher at $36.85 per barrel. The U.S. dollar is lower, and the Dow Jones Industrials are 210 points higher.

On Wednesday, private exporters reported to the USDA export sales of 186,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 66,000 metric tons is for delivery during the 2019/2020 marketing year and 120,000 metric tons is for delivery during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors are watching outside money and upcoming USDA yield data.

"Many analysts will be releasing estimates for the upcoming USDA WASDE report in coming days. The prevailing story right now is the fast pace of planting and the excellent crop ratings to start the season," Kluis told customers in a daily note.

Kluis added, "The continued decline in the U.S. dollar should help the export market. The dollar is now trading at the same levels seen in mid-March as the chart continues to favor the bears. Crude oil is now trading in the gap that was created on Monday, March 9. The July crude contract needs to trade up to $41.88 to fill the gap. Will the energy report this morning give the bulls what they need to keep the rally going?"

Mike

[illinifarmer]

I read that correctly? A 6-8 bu. Decrease in corn yields and the markets are down.?  You said yourself it would or should be a +20 c swing however corn is trading lower. If the estimated yield was +6 yield nationwide on corn it would be down limit no?  So, basically no matter what happens corn is going lower?  How are farmers supposed to carry any credibility in this a market when  it is consistently suppressed regardless of situational consequences?