Floor Talk June 6
At the close:
At the close, the July corn futures settled 5 1/2¢ lower at $3.78 1/4. December futures closed 4 1/4¢ lower at $3.99. July soybean futures finished 7¢ lower at $9.94 1/4. November soybean futures closed 7¢ lower at $10.13 1/2. July wheat futures settled 9 3/4¢ higher at $5.19 3/4. July soy meal futures finished $2.30 per short ton lower at $365.00. July soy oil futures closed 0.14 lower at 30.65¢ per pound. In the outside markets, the NYMEX crude oil market is $0.61 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 283 points higher.
At mid-session, the July corn futures are 2¢ lower at $3.81. December futures 1 1/2¢ lower at $4.02. July soybean futures are 3 1/2¢ lower at $9.97. November soybean futures are 3 3/4¢ lower at $10.16. July wheat futures are 12 3/4¢ higher at $5.22. July soy meal futures are $1.90 per short ton lower at $365.40. July soy oil futures are 0.07 lower at 30.72¢ per pound. In the outside markets, the NYMEX crude oil market is $0.85 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 237 points higher.
Jason Ward, Managing Director of Northstar Commodity, says that wheat continues to trade world weather.
“We view global weather as supportive with dryness still negatively effecting the Black Sea wheat areas, there is some rain in the forecast, but it is at the end of next week,” Ward says.
He adds, “Eastern Australia also has dryness concerns which we are estimating at 30%. Another area of dryness that continues to pop up is China, their Northern Plains are struggling for moisture and are on a similar growing schedule as US corn/soy. This story could have bigger ramifications if this dryness were to continue through the end of the month.”
Ward is asking the question, will China’s own crop production potential have an effect on its negotiating on trade? The longer they stay dry, the more valuable the US relationship becomes, Ward says.
“There is no doubt in my mind that these trade discussions and tariffs have been a negative to US agriculture. At the very least they have stalled the upward momentum that this market had started to build in December of 2017, and continued through the Argentine drought, and now through the end of the Brazilian double crop, which by all estimates is falling sharply from USDA’s May estimates,” Ward says.
The morning model runs for the US turned cooler on day seven, as a trough comes down and potentially breaks down the ridge for a few days. “This along with “no word” from the White House on China’s latest offer has more speculative length moving out of corn/soybeans. There is trapped length in both of these markets, that are at losses because of how fast we fell on price over the past 7 trading sessions,” Ward says.
July corn has wiped out 65% of its rally from January in 6 trading sessions.
“Let that sink in for a minute… now ask yourself if that seems overdone or if we have contract lows in our sights, which are at $3.62.
So today’s story is wheat weather, driving prices up. corn/soy floundering looking for a trade deal as bearish weather forecast for the US lean on prices,” Ward says.
At the open:
In early trading, the July corn futures are 1 1/4¢ lower at $3.82. December futures 1/2¢ lower at $4.03. July soybean futures are 1 1/2¢ higher at $10.02. November soybean futures are 1 1/4¢ higher at $10.21. July wheat futures are 10¢ higher at $5.20. July soy meal futures are $0.60 per short ton lower at $366.70. July soy oil futures are 0.04 higher at 30.83¢ per pound. In the outside markets, the NYMEX crude oil market is $0.27 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 103 points higher.
Wheat futures were higher overnight on worries about the Russian crop and forecasts for hot, dry weather in the southern Plains. Wheat added 5-6 cents while corn gained 1 cent and beans were up 2 cents overnight. President Trump reportedly rejected a deal between big ethanol and big oil that would've allowed year-round sales of E85 but also would've let oil refiners count exports toward their RFS requirements, a proposal that had been soundly rejected by farm-state lawmakers. Sen. Grassley and Rep. Ernst, both from Iowa, tweeted that the president had rejected the deal. In weather news, a storm has moved out of the Rockies and is now bringing rain -- and possibly severe weather -- to eastern Nebraska and western Iowa this evening, according to the National Weather Service. Check out all the details in today's 3 Big Things.
West Texas Intermediate = down 0.4%.
Brent Crude = up 0.1%
Dollar = down 0.3%.
Wall Street = U.S. stock mixed pre-market.
World Markets = Global stocks higher overnight.
Re: Floor Talk June 6
In my opinion, which will not make you any money, we'll have another opportunity to hedge production of this year's crop. I'm not selling at these levels and I'm not buying back my shorts.
Day trades don't matter until the time comes when you have to or want to sell. Hedging counts all the time but doesn't take many trades to do.