Floor Talk, March 29, 2018, (Report Day)

[marketeye]

At the close:

At the close, the May corn futures finished 17 1/2¢ lower at $3.56 1/2. July corn futures ended 17 1/2¢ lower at $3.66 1/4.

May soybean futures ended 5 1/4¢ lower at $8.84 1/4. July soybean futures closed 5 1/4¢ lower at $8.97 3/4.


May wheat futures finished 6 3/4¢ lower at $4.57 3/4.



May soymeal futures closed unchanged at $306.50.

May soy oil futures closed 0.27 lower at 28.36¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.90 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 148 points higher.

Mike

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11:00am:

USDA SAYS:

U.S. Acreage:

Corn=  92.79 million vs. the average trade estimate of 91.332 million and the USDA’s February estimate of 92.0 million.

Soybeans= 84.6 million vs. the trade’s expectation of 86.16 million and the USDA’s February Outlook estimate of 85.0 million.

All Wheat=   47.33 million acres vs. the trade’s expectation of 46.915 million and the USDA’s February projection of 47.0 million.

Spring Wheat= 12.8 million acres

Grain Stocks:

Corn=   8.60 billion bushels vs. the avg. trade estimate of 8.335 billion bushels and 8.892 billion at this time a year ago.

Soybeans=  2.72 billion bushels vs. the average trade estimate of 2.683 billion bushels and 2.109 billion a year ago.

Wheat=  1.59 billion bushels vs. the avg. trade estimate at 1.555 billion and a year ago stocks at 1.495 billion.

**On-farm corn stocks are up 129 million bushels from last year, with commercial having 416 million bushels less than a year ago. The soybean On-farm stocks are up 415 million bushels, with commercial holdings up 191 million bushels.

Trade Reaction:

--Britt O'Connell, Commodity Risk Management Group cash advisor, says that the reports are price-negative.

“Corn planted acres are up 4% from last year to 92.8 million acres. Soybean acreage estimated at 84.6 million acres. This was on the high side of corn estimates, heading into the report and on the low end of estimates for soybeans. Corn market is down hard - trading down 10 and beans are flat.”

O'Connell added, "After time to digest the report a little more, it seems as if the USDA is planning on nearly 5 million acres of crops that do not get planted. As we comb thru the numbers here it appears that they were not allocated to any other area in a large way. Soybean total stocks were up 29% while corn stocks were down 3 %. On the soybean side this is likely offsetting some of the price action and why we see beans mostly unchanged."

--Sal Gilbertie, Teucrium Trading, says that the higher than expected corn stocks and lower corn disappearance numbers took a toll on corn prices after the report.
“That data dragged the entire grain complex down, even though wheat and soybean numbers were largely neutral versus expectations,” Gilbertie says.

Gilbert added, “Traders will wonder what extent the flooding will have on inventory and planting numbers moving forward. Also, the U.S./China trade negotiations, coupled with the weather headed into planting season will determine prices from this point forward. Bears seem in control for now, but flood losses, ethanol plant restarts, and Chinese buying could put an end to downward price momentum in the weeks ahead.”

--Jack Scoville, PRICE Futures Group, says that clearly the corn data was considered very bearish. 

"Stocks numbers were above the average trade guess due to less feeding, which is always a surprise given the animal numbers out there.  And the plantings intentions report might have been reasonable a month ago, but with all of the rain now and with a wet spring in the forecast I view it as very suspect.  It could drop pretty easily to 91.  It was interesting to see the cut in spring wheat acres, not sure how to handle that one yet.  I had no problem with bean stocks, we should know due to better demand reporting and we did.  The beans planted area could go up a million acres or so.  I think the corn reaction is extreme and we will see buying surface once the fund and other selling subsides."

--Jason Roose, U.S. Commodities, says that the larger corn acres and and larger grain stocks continue to take premium out of the market.

“With very little risk premium added going into spring, the 3 percent increase of corn stored on farm from last year continues to be an anchor. Soybean acres are anticipated to be smaller than last year at 84.6 mln acres, which is considered friendly, but stocks are up 29 percent from last year which will limit rallies temporarily,” Roose says.

What say you?

Mike

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At 9am:

In early trading, the May futures are 3/4¢ lower at $3.73. July futures are 1¢ lower at $3.82.

May soybean futures are 2 1/2¢ higher at $8.92. July soybean futures are 2 1/2¢ higher at $9.05 1/2.


May wheat futures are 3 1/4¢ lower at $4.61.



May soymeal futures are 1.30 per short ton higher at $307.80.

 May soy oil futures are 0.03 lower at 28.60¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.88 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 105 points higher.

Private exporters reported to the U.S. Department of Agriculture the following activity:

--Export sales of 816,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year; and

--Export sales of 150,000 metric tons of hard red winter wheat for delivery to Iraq during the 2018/2019 marketing year.

The marketing year for wheat began June 1 and soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors are preparing for today’s USDA Reports.

“Even if we get a surprise and get a bullish report in corn and soybeans. the funds will be there to defend their large short positions. Watch the trade action after the report today, and more importantly where the corn and soybean prices close. Often during the release of these big crop reports we get a big trading range,” Kluis told customers in a daily note.

He added, “Thursday was a pretty typical day for US grain prices leading up into a major crop report. Low volume and a tight range of trade have the traders patiently awaiting the USDA numbers. Weekly export sales on Thursday showed a nice uptick in corn but disappointing for the soybean complex."

Mike

[sw363535]

prediction 

No accounting for floods or winter issues 

continue to ignore cattle on feed numbers --- still our largest user of corn....in any form.

no accounting for acres lost in 2018 or 2019

Or we might get to see some reality     like a 20% reduction in Nebraska acres or yield... a 30% reduction in ks corn acres

a correction of the carry in corn and beans    especially corn --somewhere below the 1b mark.  

Maybe a recognition of the insurance claims of the previous two years ....... ignored to date.

best guess.... same old same O.......    and very little real data involved.   imaginary agriculture.  Like Al..... only opinion from those we doubt know.

[illinifarmer]

Let’s not forget to take into account the -10 cents on corn and the -20c on soybeans already this week, which youall said was to position yourselves for this report.?.

[illinifarmer]

Wow 😲 hit the nail on the head with that one. So now we’ll have more corn somehow growing out of water. Unbelievable how bad some people get away with outright lies and thievery!!! Farm bankruptcy already at record levels going to get a lot worse.

[nutlug]

The numbers in this report are as of March 1st so there would be no allowance for flood damaged grain.

[cborman11]

What BS report not surprising though they wanna keep these prices as low as possible.

[roarintiger1]

I fully expect food prices at the grocery store to be lower by Monday morning.

[nutlug]

So any suggestions for marketing strategies going forward? Or are we all going to just complain about how USDA cooks the books to keep prices low.

I dont have any ideas. Looks like the American farmer is going to shoot themselves in the foot again this year planting every acre and trying for top yields. But what else can we do. Same as it ever was.

I am sure there are marketers out there who saw the writing on the wall and have two years of production forward contracted at better prices than todays but I am not one of them. I guess my marketing weakness is that I always think better days are ahead. I bought July calls earlier this month so that when we got a rally I would make some cash sales and not just let the rally pass me by. There was a small rally that went up like an escalator and then dropped like an elevator and today the elevator cable feels like it broke.

[samalan1140]

1/3 of the nations farmers will de done after this yr with these crap prices,bet none of the traders that trade the farmers livlihood aren't in any trouble they have no idea what hard work is or hard times.

[futurestrader92]

To all the farmers complaining about todays report. If you think it is wrong, get long futures! If you know it is wrong, get long futures! Punish the market for its ignorance, instead of complaining use today as a gift horse and quit looking at it in the mouth.