Floor Talk March 24

[marketeye]

At the close:

At the close, May corn futures settled 3 cents higher at $3.93 1/4 per bushel. The Dec corn futures finished 3 cents higher at $4.17 per bushel.
May soybean futures settled 1 3/4 cents lower at $9.81 3/4. Nov. soybean futures finished 2 1/2 cents lower at $9.62 1/2. 

The May soyoil futures finished $0.04 lower at $31.11. The May soymeal futures closed $1.00 per short ton lower at $326.30.

May wheat futures ended 10 1/2 cents lower at $5.23 1/2.

In the outside markets, the NYMEX crude oil market is $0.01 higher per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 68 points lower.

Mike

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At mid-session:

At mid-session, the May corn futures are trading 2 1/2 cents higher at $3.92 3/4 per bushel. The Dec corn futures are trading 1 3/4 cents higher at $4.16 per bushel.
May soybean futures are trading 5 1/2 cents lower at $9.78. Nov. soybean futures are trading 5 1/4 cents lower at $9.59. 

The May soyoil futures are trading $0.01 lower at $31.14. The May soymeal futures are trading $3.10 per short ton lower at $324.20.

May wheat futures are trading 9 1/4 cents lower at $5.24.

In the outside markets, the Brent crude oil market is $0.50 higher per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 14 points higher.

Mike

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At 9:25am:

Corn has turned slightly higher. So, thanks to Jordan Anderson for filling in for me last week. I traveled south to the state that is just below the state that hosts the National Peanut Festival.

A few thoughts, if I may:

While driving through the northern part of Florida, I did see some fieldwork being conducted. That soil is really red, especially when it is getting turned over. I saw a lot of wheat that looked really good. As I went through the St. Louis area, I noticed the Ritchie Auction location was completely full. As it turns out, they do have a sale this week they are preparing for. A lot of equipment for sale. What does that tell you?
I did see, north of St. Louis, a few farmers that have their planters hooked up to the tractor and sitting outside of their sheds. In fact, at one gas station, I talked to a local farmer that says he will plant before April 15, if weather permits. His quote was, "I just need these prices to go up!"

At that point, I didn't tell him what I did.

Meanwhile, yesterday, I talked with a floor trader. Now keep in mind that he is promoting the need for farmers to learn about and consider using options contracts in their marketing plans. He says the market is getting worried about the big crops still out there in the bins, around the world, and the crops coming out of the ground, around the world, and those big crops that will be put in the ground soon in the U.S. "If the interest rates are jacked up in June through August, farmers will be faced with dumping crops on the market, at a time when prices could see sub $3 corn and $8 soybeans.

What do you think? Yes, I always remember that I asked for your opinion?

Mike

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At the open:

At the open, the May corn futures are trading 1 1/4 cents lower at $3.89 per bushel. The Dec corn futures are trading 1 1/4 cents lower at $4.13 per bushel.
May soybean futures are trading 5 1/4 cents lower at $9.78. Nov. soybean futures are trading 5 cents lower at $9.60. 

The May soyoil futures are trading $0.17 lower at $30.98. The May soymeal futures are trading $2.50 per short ton lower at $324.80.

May wheat futures are trading 7 1/4 cents lower at $5.26.

In the outside markets, the Brent crude oil market is $0.07 lower per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 54 points lower.

Mike

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At 7:40am:

Early calls: Corn 1-2 cents lower, soybeans 2-4 cents lower, and wheat 5-7 cents higher.

Trackers:
Overnight grain, soybean markets = Trading mostly lower.
Brent Crude Oil = $0.09 higher.
Dollar =Higher. 
Wall Street = Seen higher, with key data releases expected Tuesday.

World Markets = Europe stocks were higher, Asia/Pacific stocks were lower.

More in a minute,

Mike

[ECIN]

Some interesting info - I recieved from a very good friend . Also Talked to good friend down in LA this morning - said that any corn that was planted was mudded in - Believe it's April 15 for insurance cut off date for corn . Very Wet and cool down there - even sleet with some snow .

TX corn plantings 14% versus 19% LY and 37% average.

TX sorghum planting 7% versus 14% LY and 28% average.

LA corn planting 1% versus 17% LY and 48% average.       Topsoil 76% surplus

MS corn planting 0% planted versus 7% LY and 17% average.       Topsoil 84% surplus

AR corn planting 0% versus 8% LY and 11% average.

Corn planting badly delayed in South

[Hobbyfarmer]

Freezing rain here, starting to have ice on the trees

[Palouser]

The financial literacy in this country is truly sad. I say that after reading some articles this morning and then the trader's statement about the interest rate maybe being 'jacked up' later this year. What an absolute crock! The interest rate can't and won't be 'jacked up' at will without severe consequences - like completely crashing the economy - which the Fed knows. But apparently the 'trader' either has no idea of, or chooses to use as a scare tactic.

The news outlets have apparently no financial talent left as this morning a top article was that rising fuel prices are a 'good thing' after three months of sharpely falling consumer price index readings. There is nothing inherently 'good' or 'bad' about fuel changing price unless it's a true reflection of underlying economic activity - which no one could claim at this point.

The news now states that 'low interest' is 'not good' vs higher inflation. Simply another crock! It is the entire economic picture that is a danger, not interest rates themselves. Higher economic activity and low interest rates could be great! But it just happens that we (and much of the globe) are in danger of deflation. But the popular news doesn't use the word 'deflation', apparently because they don't understand it or they don't want to have to explain what deflation is to a public they think is too ignorant to understand. And maybe they're right. Ideology has maybe replaced facts? Therefore it is a battle of popularity among ideas, not truth or facts. I'm not sure what to be more scared of! news outlets? Or the dumbed down public.

[Canuck5]

EXCELLENT rant Palouser!!  When I hear 'traders' like the guy Mike is referring to, I can't leave the room or turn off the sound fast enough. The financial literacy among the general public is probably not what it should be, but among the talking head 'analysts' and traders, it is pitiful.  And the hubris they exhibit when they pontificate for the benefit of all of us 'illiterates', is SO nauseating.

[marketeye]

Palouser,

It's being said that you have to be in your 90's to have exoperienced the last deflationary economy, in the U.S. So, it may be that none of the writers and hardly anyone else in the country knows what deflation really means and how to deal with it.

Mike

[Palouser]

Deflation is a necessary part of studying economics. Any writers on the subject should have some understanding of what it is about. But perhaps journalism is dead.

On the other hand, it could be said that domestic understanding of deflation didn't really exist during the Great Depression. There was denial of the mechanics of economic stimulation because it was identified with Keynse, who didn't come out with a completee book on the theory of currency flow, consumer demand etc until 1936.

Keynes was ideologically villified because he was indentified with Roosevelt, but Keynes' views have long since won out. It's basically the only explanation we have for modern economies in general. Republican's have occasionally trashed Keynes but when they want to stimulate the economy it is based directly on his ideas regardless of how it is explained.

In fact, Kenynesian Economics explains exactly why we have low interest rates and low inflation while the Fed pumps in its trickle into the part of the economy that doesn't really need the money at the moment. And it is a strong argument for Congress to get its head out and stimulate the middle class economy before it no longer responds. Japan's consumer demand is dropping again but, it's been in trouble for 25 years. It no longer responds to government stimulation that doesn't help the middle class confidence. We are going exactly the same route as they traveled.

[Hobbyfarmer]

Pal, you talk about it and vilify the successful.

Just how would you stimulate the middle class?

[Palouser]

I'm not villifying the successful. That's not the issue. I'm villifying a process that aids those already successful at the expense of the middle class. How about a flat tax now subtracting only direct expenses, eliminating all loopholes and treating ALL income the same? There is not a chance in Hades that it would get passed out of the House of Representatives! EVER! (It was a red herring when it was introduced, of course. Kind of like term limits).

My concern is that a functioning democratic republic can't exist without a strong middle class. As soon as Rome destroyed it's middleclass in favor of the privilaged it became a dicatorship, never again to recover for any length of time. I don't think transparent markets can survive without the ability of the common man (middle class) being fairly represented and a chance to participate w/o being dominated by powerful interests. Neither can productive politics. The Greeks began making horrendous strategic mistakes when [they destroyed their middle class and] politics became only a popularity contest.

[Hobbyfarmer]

http://www.google.com/search?ie=UTF-8&source=android-browser&hl=en-US&q=jon+mcnaughton#imgrc=aTPfpVc...