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Veteran Advisor

Floor Talk, March 16, 2020

At the close:

At the close, the May corn futures settled 11¢ lower at $3.54 1/2. July corn futures ended 10¢ lower at $3.58.

May soybean futures finished 27¢ lower at $8.21 3/4. July soybean futures closed 25 1/2¢ lower at $8.30 3/4.

May wheat futures closed 8¢ lower at $4.98.

May soymeal futures closed $3.20 per short ton lower at $296.30.

 May soy oil futures closed $0.79 cents lower at 25.58¢ per pound.



In the outside markets, the NYMEX crude oil market is $2.84 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 1,936 points lower.

On Monday, the DJIA fell 8%, triggering the system's circuit breaker. The markets closed for fifteen minutes, before resuming trade.

Mike

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At midsession:

At midsession, the May corn futures are 11 1/4¢ lower at $3.54 1/2. July corn futures are 10 1/4¢ lower at $3.58.

May soybean futures are 16¢ lower at $8.32 3/4. July soybean futures are 14 3/4¢ lower at $8.41 3/4.

May wheat futures are 14¢ lower at $4.92.

May soymeal futures are $1.30 per short ton lower at $298.20.

 May soy oil futures are $0.79 cents lower at 25.58¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.70 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 1,801 points lower.

On Monday, the DJIA fell 8%, triggering the system's circuit breaker. The markets closed for fifteen minutes, before resuming trade.

Jack Scoville, PRICE Futures Group, says that the ag markets are holding reasonable well, although the meat markets are limit down.

“Rice is seeing a lot of demand, as rice is non perishable. So are some other items. The funds and other specs are still selling, I think. Maybe some commercial buying and some short covering by specs. Been absolutely incredible what has happened, not only with the coronavirus but the Saudi-Russian trade war. A perfect storm for demand hitting the markets," Scoville says.

Peter J. Meyer, S&P Global Platt’s Head of Grain and Oilseed Analytics, says that the story remains a macro story, but corn spreads are getting attention today.

“With gasoline making multi-year lows of 68 cents/gallon and oil below $30, the ethanol business is incurring even more pain. Rumors were flying this morning that ethanol plants were making drastic cuts to their cash bids, which seems to be reflected in the relative collapse of corn futures spreads and resulting steepening of the curve. This would suggest that ethanol pants are indeed shutting down, as ethanol prices reach their lowest April levels in history," Meyer says.

 

Mike

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Mike

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At 8:45am:

In early trading, the May corn futures are 6 1/4¢ lower at $3.59 1/2. July corn futures are 6¢ lower at $3.62.

May soybean futures are 7 3/4¢ lower at $8.41. July soybean futures are 7 1/4¢ lower at $8.48 3/4.

May wheat futures are 8 1/4¢ lower at $4.97 3/4.

May soymeal futures are $2.30 per short ton lower at $297.20.

May soy oil futures are $0.63 cents lower at 25.74¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.79 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 2,250 points lower.

Al Kluis, Kluis Advisors, says that investors should prepare for another volatile week.

“The Federal Reserve Board made an emergency cut in US interest rates on Sunday, taking short term rates down to zero in an effort to stabilize the global financial system. However, it is not working, so far. Grains are mostly lower," Kluis told customers in a daily note.

Kluis added, "Yesterday, the Fed took interest rates to zero and announced they would put $700 billion into a quantitative easing program. This shows how fast the US economy is heading to a recession. This is the first of several steps that the Fed will take. Watch the global and US stock markets. When the stock market stabilize, the grain and meat markets will find a bottom."

 

What say you?

 

Mike

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3 Replies
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Veteran Contributor

Re: Floor Talk, March 16, 2020

Farmers can't make it on these prices!!!! No reason cattle should hit like this damn idiot traders.

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Advisor

Re: Floor Talk, March 16, 2020

What right now are you saying is going to stabilize this market?  Why would anyone think or assume there’s a bottom?  Is there info that you guys are betting on like a vaccine?  That’s a year to a year and a half at best and earliest.  This market as well as the rest will be zero far before then at this rate.  Guess the old economy wasn’t as ironclad as some thought.  Assume the outcome of throwing a rock at a glass house the outcome is inevitable.

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Honored Advisor

Re: Floor Talk, March 16, 2020

Will last one out the door please turn off the lights.