Floor Talk, March 20, 2019

[marketeye]

After the close:

The U.S. is sitting on a record amount of ethanol stocks.

According to EIA data analyzed by the Renewable Fuels Association, ethanol production edged 1,000 b/d lower to an average of 1.004 million barrels per day (b/d), or 42.17 million gallons daily. Conversely, the four-week average ethanol production rate grew 0.2% to 1.015 million b/d—equivalent to an annualized rate of 15.56 billion gallons.

Stocks of ethanol increased 2.9% to a new record high of 24.4 million barrels, surpassing the high set 53 weeks prior.

Mike

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At the close:

At the close, the May futures finished 1/4¢ higher at $3.71 1/2. July futures are 1¢ higher at $3.81.

May soybean futures ended 2¢ higher at $9.06. July soybean futures settled 2¢ higher at $9.19 1/4.


May wheat futures closed 8 1/4¢ higher at $4.64 3/4.



May soymeal futures closed 0.80 per short ton higher at $311.60.

 May soy oil futures settled 0.03 higher at 29.27¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.09 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 18 points higher.

Mike

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At midsession:

At midsession, the May futures are 1¢ lower at $3.70 1/4. July futures are 1¢ lower at $3.79 3/4.

May soybean futures are 1¢ higher at $9.05. July soybean futures are 3/4¢ higher at $9.18 1/4.

May wheat futures are 2 3/4¢ higher at $4.59 1/4.

May soymeal futures are 0.60 per short ton higher at $311.40.

May soy oil futures are 0.04 higher at 29.28¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.85 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 135 points lower.

Jason Roose, U.S. Commodities, says that the bullish market factors are lining up.

“Grains are higher today, while finding value in a market that has limited downside. The bullish factors such as a wet Midwest, uncertain future weather forecasts, tightening basis levels indicating that our domestic demand is strong at these levels, trade negotiations with the U.S. and China will continue to give the market volatility with consistent demand the final outcome,” Roose says.

Mike

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At 9:26am:

In early trading, the May futures are unchanged at $3.71 1/4. July futures are unchanged at $3.80.

May soybean futures are 2 1/2¢ lower at $9.01 1/2. July soybean futures are 2 1/4¢ lower at $9.15 1/4.

May wheat futures are 2 1/2¢ higher at $4.59.

May soymeal futures are 1.60 per short ton lower at $309.20.

May soy oil futures are 0.10 higher at 29.34¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.19 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 124 points lower.

Al Kluis, Kluis Advisors, says that the outside markets could lead the way higher.

“So far this week, there appear to be willing buyers on breaks. Is this a sign that funds are trying to quietly cover shorts on any pullback? That idea sure seems legitimate as spring planting is just around the corner,” Kluis told customers in a daily note.

He added, “With the funds holding a record short position in corn, I suspect fund managers are a little nervous given the current 30-day forecast. Those fund managers do not want to see prices close over last week's high because it would likely trigger short-covering."

Mike

[JimMeade]

I bought some July corn - quite rare for me to be a trader.  I have a sell price set.  We'll have to see.  It is too early to panic about the weather, but with large shorts and needing weather to moderate a bit (which we hope and expect it will) it's possible there could be a dime or a bit (which is 12 1/2 cents as you know) on the table.

[sw363535]

I think it is a safe move, Jim.

You might need to be patient, but maybe not.  There is a lot of negative news hitting us now and for the next few weeks.  News that could be very positive for wheat and corn... Weather and some south american sales that might not get reported in the US but argentina is sure squeeling about wheat going to Brazil...

Right now there is more corn going east and down the river now(if you include the grain in storage in flood waters) than corn heading south to feedlots.  A picture today was real scary for anyone who stores grain.   ---- we are just 3 months after Bean and corn acres went into winter waiting to be harvested...... too much snow and rain and super cold..... I doubt they got harvested.

Also Hobby sent me a picture of an unpicked field of cotton ....... in Iowa..... with open bowls and cotton made.... not good  stuff by texas standards but "it made".   Any way the goofyness isn't over...... I want to run out to colorado badly..... there is more snow piled up in the southern Rockies that the last 3 decades.  170 inches of base at Wolf Creek ski area yesterday.. ...... it is deep over an extremely large area of high country...... High country that doesnt have many live trees left to hold it up there.  A lot more water is coming down the Platte and Arkansas pretty soon.... especially if it warms up quick and another reservoir or two can't hold it.

That cotton field is kind of a unbelieveable anomaly, but it emphasizes how many corn and bean acres in Ks and the panhandle region went to cotton.... sw ks road ditches are starting to look like a lint trap.

It is time to be short covering.... 

[sw363535]

I won't post any more pictures, there are lots of them around social media to see....

and no one cares about old crop ..... usda already has it determined..... but if there is a few hundred thousand bushels in "wet" storage now or a few million.... it all came off of that usda number.      A lot of ethanol plants are at river side and a lot of ground stored bushels 

I have seen water on the arkansas river at garden city ks several feet over the area where that big ethanol plant sits with its ground storage and elevator. And they have been releasing water from the only reservoir from there to the snow pack, for over a month now because of the high water flow in the arkansas.  A much smaller deal than the Platte which could be a problem for a few months yet.

might not be bottled up market all spring either.

[roarintiger1]

Even if the USDA would lower the corn supply 300 million bushels in the next report, chances are that they would add them back in the one after that. Can't have those farmers making too much money now can they?