Floor Talk March 15

[Tony_Dreibus]

At the close:

At the close, the May corn future finished 2¢ lower at $3.86 3/4. July futures finished 2 1/4¢ lower at $3.94 1/2. May soybean futures settled 8 1/2¢ higher at $10.40 3/4.  July soybean futures finished 8 1/2¢ higher at $10.40 3/4. May wheat futures fiinished 10¢ lower at $4.78 3/4. May soy meal futures closed $0.10 per short ton higher at $371.00. January soy oil futures closed 0.38 higher at 32.06¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.25 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 150 points higher.

Jack Scoville, The PRICE Futures Group’s Senior Market Analyst, says that the market is supported by weather and demand today.
“Even though corn is fading today it has the big demand for sure.  Soybeans too and the forecasts are still mostly dry for grains areas in Argentina, perhaps too much rain now for southern Brazil to slow the harvest there.  Forecasts for some rain in the next couple of weeks for Kansas and the export sales report killing the wheat.”

Mike

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Why are soybeans up, today? This might have something to do with it.

REUTERS: ARGENTINE 2017/18 SOY CROP SEEN AT 40 MLN TONNES VS PREVIOUS 46.5 MLN TONNE ESTIMATE - ROSARIO EXCHANGE

Mike

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At mid-session:

At mid-session, the May corn futures are 3/4¢ lower at $3.88. July futures are 1¢ lower at $3.95. May soybean futures are 12¢ higher at $10.44.  July soybean futures are 11 3/4¢ higher at $10.54. May wheat futures are 8¢ lower at $4.80. May soy meal futures are $1.70 per short ton higher at $372.60. January soy oil futures are 0.38 higher at 32.09¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.38 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 257 points higher.

Mike

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At 9:35am:

In early trading, the May corn futures are 1 3/4¢ higher at $3.90. July futures are 1 1/4¢ higher at $3.98. May soybean futures are 7 1/2¢ higher at $10.39.  July soybean futures are 7 1/2¢ higher at $10.50. May wheat futures are 4¢ lower at $4.84. May soy meal futures are $2.20 per short ton higher at $373.10. January soy oil futures are 0.09 higher at 31.80¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.33 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 77 points higher.

Mike

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Soybean futures were higher in overnight trading as two reports are expected to be positive this morning. The export sales report is forecast to show strong sales of beans while the NOPA crush report is projected to show processing last month was up almost 5% year-to-year. Beans added 7 cents, corn was up about a penny and wheat gained 2-4 cents overnight. Ethanol stockpiles, meanwhile, jumped to a record last week, the Energy Department said in a report. Production declined to the lowest level in a month. Neither data point is good for corn producers. In weather news, the red flag warning in eastern Oklahoma now encompasses an area covering much of New Mexico, eastern Colorado, pretty much the entirety of Kansas and Oklahoma and much of the Texas panhandle. It's dry down there, and there's no relief in sight. Finally, I talked to some farmers the past few days and they told me they're fighting to keep the 199A "fix" from being implemented. Under the current law passed in December, growers get a much bigger tax deduction than they will after the fix -- check out the story here.

For everything else, see today's 3 Big Things at https://www.agriculture.com/news/three-big-things/3-big-things-today-march-15.

Brent Crude Oil = up 0.3%.

West Texas Intermediate = up 0.5%.

Dollar = up 0.2%

Wall Street = U.S. stock futures higher in pre-market trading.

World Markets = Global stocks mixed overnight.

[roarintiger1]

I just read the article on the 199a fix.   Here is a quote...."The amended provision will just ensure the pricing power stays with producers."

"STAYS"  ????????    When....I say when......have producers EVER had the pricing power?    

I do understand what they are trying to say.  It's just a poor choice of words.    

[illinifarmer]

Alternative facts , follow the leader this is the reality. It’s a joke!!!

[BA Deere]

On the 199a deal, I think what they mean is "producers" aka Bigshots that bypass the local coop elevator and go directly to the beanmeal plant or e-plant.   Might be tempted to get in line with the Allis Chalmers and Parker wagons in order to get that sweetheart 20% off their gross income.  And that would leave the e-plants scrambling to compete with the coops, I see both sides, however if a "fix" doesn`t happen, it wouldn`t hurt my feelings to see the little guy get thrown a bone with some meat on it for a change.  

But, it`s all moot to those that don`t show a positive figure at the bottomline of their schedule F.

[sw363535]

The choice of words was not accidental or poor. Whatever is necessary to keep the grain flowing.

Maintaining global surplus mentality on a 45 day delivery limit.

[Hobbyfarmer]

THE GRAIN IS FLOWING, LINES MEASURED IN HRS AT THE CRUSHERS, replant I go to is shut this week for maintenance.

Still had trucks show up for two days.

The "fix" is so the few don't get "free money" can t leave a dollar UNtaxed. At these prices most farmers are not in much of a taxable position, only a few ol coots out of debt will benefit.

[timetippingpt]

BA not to bust your bubble, but the real "BigShots", as you derisively call them, have already formed their own coops (only takes about $15k to start one) and have delivered all of this year's sales through their own personal coop (formed with at least 5 other big shot friends of course: I doubt they called you 🙂   ). 

The 199A is a ill-advised tax advantage for coops that  Chuck Conner stuck in the bill after midnight that has unlimited unintended consequences. If allowed to stand the incentive for non-farm investors to run tax schemes in ag is astronomical. Bad policy is bad policy, even if you think is helping you, it is not. jmo

A great day in the markets today, following a nearly perfect high at the perfect time. SomeTIMES things work out as expected.

[sw363535]

time thanks for the "swamp" update...... that is a clear description....... wonder why we can't see the same happen in crop insurance...  we turn a blind eye when crop insurance agencies sprang up like dandelions and within two seasons were buying farmland and looking for investments.

[BA Deere]

Time, it`s the e-plant, bean plant or non-coop elevator that would be scrambling for grain...if they didn`t think it would get "fixed".   If a Bigshot farmer doesn`t make money on paper, he probably wouldn`t be too buttered about the 20% gross income advantage that the poor sap with a Minneapolis Moline and a Kill Brothers wagon sitting at the coop would have.  But to set up a enduser coop on the fly, to have elected directors and send out dividends so as not to show a profit, would be a lot of monkey business beyond that $15,000 application fee.

Either way fix it or not is fine, but if it doesn`t get "fixed", I`ll smile a little, making sure I cover my mouth   🙂

[BA Deere]

What I think could be a easy "fix" if the politicians don`t "fix" it, is:  There`s a couple area coops that handle grain sales for a hog finishing feedmill and one coop handles buying grain for a egg laying outfit.  So, run sales of the non-coop endusers through the local coop elevator.   It`s true the coop would want a finder`s fee or whatever and the extra revenue would allow them to pay more for their member`s grain and pay better dividends....but there`s nothing wrong with that   🙂