Floor Talk March 10
At the close:
At the close, the May corn futures settled 3 14 cents higher at $3.62 3/4. May soybean futures settled 3 1/2 cents higher at $8.89. May wheat futures ended 8 3/4 cents higher at $4.77. May soymeal futures finished $0.60 per short ton lower at $271.90. May soyoil futures settled $0.12 lower at $31.86. In the outside markets, the Brent Crude oil market is $0.11 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 91 lower.
At mid-session, the May corn futures are trading 1 3/4 cents higher at $3.61. May soybean futures are 1/4 of a cent higher at $8.86. May wheat futures are trading 4 1/4 cents higher at $4.72. May soymeal futures are $0.60 per short ton lower at $270.70. May soyoil futures are trading $0.05 lower at $31.69. In the outside markets, the Brent Crude oil market is $0.78 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 80 lower.
The farm markets have turned higher, due to the falling U.S. Dollar and other macrofactors, Scott Shellady, CME Group floor trader, says.
"Well there was a general, overall feeling of buoyancy after the ECB came out in Europe with more accommodation than expected. All markets initially liked it....."
If you missed it:
USDA released friendly Weekly Export Sales Thursday.
Corn sales totaled 1.17 million metric tons, up 7% from the prior week and 37% from the four-week average, the USDA said. Mexico was the big buyer, purchasing 339,100 tons for delivery in the current marketing year, and Japan bought 306,900 tons. Colombia purchased 258,800 tons, the agency said.
Soybean sales totaled 475,200 tons, up 8% from the prior week and 2% from the previous four-week average, according to the government. The Netherlands bought 140,000 tons – the sale was switched from previously unknown destinations – while Indonesia made a purchase of 96,400 tons.
China bought 76,000 tons, including 65,000 tons that were switched from unknown destinations.
Wheat sales of 330,600 tons for delivery in the 2015-2016 marketing year were down 4% from the prior week, but up 6% from the prior average, the USDA said. Japan bought 127,200 tons and Taiwan purchased 103,400 tons.
At the open:
At the open, the May corn futures are trading 1 cent lower at $3.58. May soybean futures are 3 cents lower at $8.82. May wheat futures are trading 1/2 of a cent higher at $4.68. May soymeal futures are $1.50 per short ton lower at $269.80. May soyoil futures are trading $0.10 lower at $31.63. In the outside markets, the Brent Crude oil market is $0.03 lower per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 18 higher.
Matt Pierce, Futures International LLC, and CME Group floor trader, says that macro-factors are moving the market slightly higher.
"The big market factor is the reversal in the USD/Euro. This triggered some short covering on FX movement. Pain trade in wheat gaining technical momentum."
Beans and grains were all lower overnight after the USDA report, while not bearish, showed that the we still have a lot of each commodity on hand, and will for a while. The trade seems bored, and it'll likely take some sort of black swan event to get traders excited, or at the very least put them in a buying mood.
At 6:15 am:
Brent Crude Oil = 0.8% lower.
West Texas Intermediate Crude Oil = 0.4% lower.
Dollar = up 0.2%.
Wall Street = U.S. stock futures slightly higher in pre-market trading.
World Markets = Global stocks mixed as world awaits European Central Bank decision on rates.
Re: Floor Talk March 10
Contrary to some on the ag boards I visit, there really is no shortage nationwide...yet.
Our local coop has been full of corn, sent text yesterday afternoon they would take corn till noon today, then they'd be full again.
The local Gavilon terminal has filled with beans and shut off deliveries this week.
We are a fringe area, anything south of hwy 92 in Iowa is negligible, at least that has been the story for 30 years.
The important thing is, at least in the grain market is what is basis...are buyers/users of grain swamped with sellers or are they actually having to bid up and heaven forbid, call and look for supplies.
As full as we are locally I'm surprised at basis here. Seems the bid is being held up by the train loaders, the E plants are fourty to fifty miles away. The local coop grinds about 12 million as chicken and swine feed. Seems to set the price about 10¢ above where gavilon would like to be, on th other hand the local Gavilon facility pays about ten to twelve cents better on beans because of the small bean plant connected to their silos and their ability to load unit trains.
Both being full five months after harvest started is not positive for price improvement right away.
Several years ago the price was disconnected from the CBOT in a large way too. +$1 basis on grain was quite telling of the disconnect between reality and the traders. Right now there is positive basis in the eastern corn belt and negative basis here, CBOT price has kind of split the difference.
I believe a higher % of grain may be moving earlier year..
1) the price is down and bills need to still be paid.
2) since the price is down about half from a few years ago it takes twice as much to pay the same payment you agreed to make when prices were high.
3) since prices are half price it may take all the grain in storage to meet the important bills and therefore grain here is moving to market faster.
4) some are just throwing in the towel, ie, quit before you get behinder.
After all Brazil is record planting right now and the USDA has us at another top end crop as good as in the bin (even though very little of it is out of the bag yet).