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Veteran Advisor

Floor Talk June 4

At the close:

The July futures corn contract closed 5 cent higher at $6.60. New-crop Dec. futures settled 7 cents lower at $5.53. The July soybean futures contract closed 4 cents lower at $15.28, new-crop Nov. soybeans finished 9 cents lower at $13.16. July wheat futures settled 1 cent higher at $7.09 per bushel. The July soymeal futures finished $1.90 per short ton lower at $452.50. The July soyoil futures ended $0.07 lower at $48.59.
In the outside markets, the NYMEX crude oil is $0.34 per barrel lower, the dollar is lower and the Dow Jones Industrials are 97 points lower.

 

Mike

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At mid-session:

The July futures corn contract is trading 1 cent lower at $6.55. New-crop Dec. futures are trading 12 cents lower at $5.48. The July soybean futures contract is trading 5 cents lower at $15.27, new-crop Nov. soybeans are trading 16 cents lower at $13.09. July wheat futures are trading 1 cent lower at $7.08 per bushel. The July soymeal futures are trading $1.00 per short ton lower at $453.40. The July soyoil futures are trading $0.24 lower at $48.42.
In the outside markets, the NYMEX crude oil is $0.33 per barrel lower, the dollar is higher and the Dow Jones Industrials are 31 points lower.

 

Why are the markets doing what they are doing? One analyst says, "The crop progress and condition reports showed better-than-expected planting progress last week. Plus, a 6-to-10 day outlook for drier conditions has the grains lower . For corn, expectations are that the crop will be planted by June 12 and beans 90% complete by the end of next week. Fear of abandoned acres are gone and switching from corn to beans looks less likely. With planting fears fading and old crop sales for corn and beans slowing, we're set up for more selling prior weeks end."

 

Mike

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At 9:25am:

All markets remain lower, in Chicago. Speaking of the windy city, the CME Group announces Tuesday KC wheat options will trade in Chicago.

 

 

Mike

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At the open:

The July futures corn contract opened 5 cents lower at $6.51. New-crop Dec. futures opened 11 cents lower at $5.48. The July soybean futures contract opened 8 cents lower at $15.24, new-crop Nov. soybeans opened 13 cents lower at $13.12. July wheat futures opened 8 cents lower at $7.00 per bushel. The July soymeal futures opened $1.60 per short ton lower at $452.80. The July soyoil futures opened $0.30 lower at $48.36.
In the outside markets, the NYMEX crude oil is $0.06 per barrel higher, the dollar is higher and the Dow Jones Industrials are 10 points higher.

 

Mike

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At 8am:

 

Here's what I'm hearing in my head, as I research market information this morning. "Ethanol production is flat, South America and Ukraine are offering corn cheaper on the export market vs. the U.S. Gulf prices, the U.S. corn crop is basically planted and has all of the moisture in the world to grow, and it could be hard for Dec. corn futures to hold a support level price of $5.50. And, there is no support for corn to trade above $5.75.

 

Regarding soybeans, the calls are going out to have producers sell at least 20% of their new crop, on the latest rally.

 

Do you all hear and consider what I just laid out? Just curious.

 

 

Mike

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At 6:40am:

 

Early calls:  Corn is seen 5-7 cents lower (old-crop), soybeans 10-12 cents lower (old-crop), and wheat 7-9 cents lower. Meanwhile, new-crop corn 10-12 cents lower and soybeans are seen 17-19 cents lower.

Trackers:
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.49 per barrel lower
Dollar=Lower.
Wall Street=Seen mixed, ahead of Fed speeches. .

World=Asia/Pacific stocks were higher and Europe's stocks are higher.

 

 

 

More in a minute,

 

Mike

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16 Replies
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Veteran Contributor

Re: Floor Talk June 4

I don't even have 20% of my beans planted. Why would I want to sell them for cheap right now? I don't understand how traders always automatically assume that more rain is always better. It isn't. Between having crops covered with water and silt, crops drowning in mucky soil, and 80% percent of my soybean seed still in the bag, I just don't see that adding up to the mythical "above trend line yield". Then consider the acres that did get planted and the acres that have had nitrogen leaching problems, or the inability to apply nitrogen, and the whole myriad of things that go along with too much moisture. Don't try to tell me that "having all the moisture in the world to grow" is a good thing. That dog won't hunt.

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Senior Contributor

Re: Floor Talk June 4

Mike, the guys on the floor and the guys with the boots on the ground see the world with quite different perspectives. I read the Reuters poll this am has the trade still seeing a 13.8 bbu crop. I would imagine you have a lot of farmers on here who would take the under, and by quite a bit. I guess in 6 months we will figure out who has it right.
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Senior Contributor

Re: Floor Talk June 4

And I couldn't agree with mike c ia more. Driving 150 miles across central IL this am. Water standing the ENTIRE drive from IN border to Bloomington to Peoria. I dont need a trader that has never seen a corn field to tell me this much water is beneficial. Not to mention the lack of heat we have had. This crop is behind big time.
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Veteran Contributor

Re: Floor Talk June 4

Haven't posted in quite a while.  The gross ignorance in the trade is aberrant.  The fact that they have chosen to stick their head in the sand quite possibly be the most bullish factor this season when the fact of the losses are realized when stand counts and ear weight are made.  No one can be certain the fact of Nitrogen loss yet but ponds for sure.  So how is that September corn looking to carry the market thru?

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Senior Contributor

Re: Floor Talk June 4

Just to throw another crop problem into the discussion.

In Ontario winter wheat is coming into the time to spray with fungicide to prevent fusarium.

The weather forecast is rain right through this short period for many fields.

No spray and ideal conditions for infection may lead to quality problems and feed wheat.

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Honored Advisor

Re: Floor Talk June 4

adjust the sails.jpg

 

Looks to me like there is not a realist left in the vicinity of the CBOT

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Veteran Advisor

Re: Floor Talk June 4

I'd say it's fun to watch these markets and the BS that is constantly used to move the market one way or the other.  I remember a few years back, we had a really bearish report put out by the USDA, and the market started out considerably lower.  Within  a couple of hours, the market was limit up.  The reason - the BS report by the  USDA.  This last report - 14 billion bu of corn the trade seems to be sticking to like glue for some reason.  Probably has more to do with the potential for losses on the crop insurance end.  And then there is the talking heads - Oh IF (the qualifier) IF the weather improves we could still be looking at $4.00 corn this fall.  In a pigs eye.  How about we look at it in the other glass half empty way -  Of, IF the weather doesn't improve, we could be looking at record prices for corn this fall.  See - I can say that too.

 

But I'll take it one step farther and back it up with a reality.  Frederick, OK - dateline 8 AM this morning.  My custom combiner is saying wheat yields ( on the wheat that is being combined and wasn't baled) is yielding between 9 - yes 9 bu/ac and the best he's seen so far is 15 bu/ac.  Farmers are wondering why the wheat market hasn't reacted.  "Oh well - you know - we're in harvest and have all this harvest pressure."   

 

Pressure is right.  As in a pressure cooker about to explode.  We've got major problems across the production area of the US right now.  The drought in the SW is unrelenting, and sooner or later that will move again into the corn belt.   Probably about the time we are going to pollinate.  But of course, instead, we hear about the 50 acres of corn that is pollinating  on the delta.  

 

These prices right now are wrong.  For whatever reason.  Someone in some board room who puts out all these non-sense articles, telling us farmers that we should just put on our rose colored glasses and sell - sell -  sell, needs to get out more often and see the reality of what many farmers in this country are experiencing.  Lock the bin doors - the drop will not be there this fall, just as it's not in the wheat fields right now.  

 

Oh - and better line up a few more boats while we're waiting for production figures so you can get all that crop imported to the US.

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Veteran Advisor

Re: Floor Talk June 4

Hobbyfarmer,

 


Good morning. I like the photo. Do you subscribe to line 1, 2 or 3? Just curious.

 

Mike

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Veteran Advisor

Re: Floor Talk June 4

Buckley_HF,

 

The thought is that any crop over 13.0 billion bushels just adds to the carryout. And, that carryout is expected to be hugely bearish, as more world corn competition comes into play. This month's June report should give us an indication on acres, but not quality of crop. So, you're right. It could be months before we know if these bear traders are right. "Adjust the sails" maybe, huh?

 

Thanks,

 

Mike

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