Floor Talk March 4

[marketeye]

At the close:

The May corn futures contract finished 13 3/4 cents higher at $4.84. The May soybean futures contract settled 13 3/4 cents higher at $14.23. May wheat futures ended 12 cents higher at $6.43 per bushel. The May soymeal futures contract settled $0.80 per short ton lower at $449.70. The May soyoil futures closed $1.33 higher at $43.71.
In the outside markets, the NYMEX crude oil is $1.69 per barrel lower, the dollar is higher and the Dow Jones Industrials are 214 points higher.

One analyst says the markets traded higher, despite the Ukrainian crisis fading. "The Informa comments are out, lowering Brazil's corn and soybean production by 1.1 million and 900,000 tons respectively. And, I think are supporting the markets here today.  Brazil is on Carnaval and not selling either.  Those are what is driving the market higher.  Ukraine is calmer that is a bit negative, I guess.   But the market is higher anyway and kind of quiet.  I am really watching the beans here.  A lot of times the market makes a spike high like it did last week, sells off, then tries to go back to the highs.  We will know a lot more about beans when we see how it finally finishes this rally attempt.  Corn and wheat are going to be more tuned into out weather and the Ukraine issues moving forward," he says.

Mike

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At mid-session:

The May corn futures contract is trading 5 1/4 cents higher at $4.76. The May soybean futures contract is 13 cents higher at $14.22. May wheat futures are 3 1/2 cents higher at $6.35 per bushel. The May soymeal futures contract is trading $2.10 per short ton higher at $452.60. The May soyoil futures are trading $0.62 higher at $43.00.
In the outside markets, the ICE Brent crude oil is $1.55 per barrel lower, the dollar is higher and the Dow Jones Industrials are 215 points higher.

Mike

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At the open:

The May corn futures contract is trading 3 cents lower at $4.67. The May soybean futures contract is 4 cents higher at $14.14. May wheat futures are 6 cents lower at $6.25 per bushel. The May soymeal futures contract is trading $1.30 per short ton higher at $451.80. The May soyoil futures are trading unchanged.
In the outside markets, the ICE Brent crude oil is $1.50 per barrel lower, the dollar is lower and the Dow Jones Industrials are 121 points higher.

Mike

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At 8:20am:

Happy Fat Tuesday. I bring this up because it's the start of Lenten season. Ash Wednesday is tomorrow. Some analysts, in their daily wires, are mentioning that this religious moment could mean less farmer selling of soybeans in Latin American countries.

Mike

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At 6:30am:

Early calls: Corn is seen 4-6 cents lower, soybeans 5-7 cents higher, and wheat 5-7 cents lower.

Trackers:
Overnight grain, soybean markets=Trading mostly lower.

ICE Brent Crude Oil=$1.63 per barrel lower.
Dollar=Lower.

Wall Street=Seen recovering from yesterday's biggest drop in a month.

World Markets=Asia/Pacific stocks were mixed, Europe stocks higher. There are reports that Ukraine's conflict is subsiding.

More in a minute,

Mike

[roarintiger1]

Good morning Mike,   I was wondering what the traders thoughts were concerning the soybean market?  Specifically, with the exports and seemingly more soybeans sold for export that takes the USDA number on the carryout below zero. Obviously they believe that there will be massive cancellations, but what are their expectations if that doesn't happen?  thanks

[marketeye]

Great question. I will ask around. But, my guess is that the market is squarely focused on how much Brazil will harvest and how fast or slow they can get its beans to the port and out of the port. Regarding Brazilian farmer selling habits, I was told the other day by a Brazilian source that no matter where you farm in Brazil, it doesn't make sense to sell your soybeans in the spot market during harvest ("it's obvious, but many farmers do that," was the exact quote). In fact, in Brazil, it would be better to avoid harvest time in Brazil and in the U.S., be prepared for weather rallies in January and February (South America) and July and August (U.S.)". Regarding forward sales, and we have talked about this before, about 40% to 50% of Brazil's soybea crop is sold before harvest.

But, back to the traders, I'll find out. I can tell you this. Jeff Coleman, The Trean Group analyst and CME Group floor trader has weighed in this morning on today's markets:

Today could be a pivotal day as traders have to keep an eye on the Black Sea region as well as get positions squared away for the next USDA report due to be released March 10th. According to the CME Group volume in corn futures was up 78% yesterday with open interest increasing by 18,784 contracts as funds came in and bought futures with both hands adding to their long position. Options traders will wait and see if ADM sells more May straddles, adding to the 15,000 they’ve sold over the last month. They sold 5,000 straddles apiece at 3 different price levels. It will also be interesting to see if CCM can ring the register on the 16,000 December $4.00 - $3.60 put spreads that they bought yesterday.
May soybean futures are taking back their 4.75 cent loss from yesterday, trading 6 cents higher this morning after trading in an 11.5 cent range overnight on modest volume. With the soybean complex not really affected by the Ukrainian situation, traders will continue to focus on the demand market for US soybeans as well as the growing conditions for the South American soybean crop. Rumors of numerous cargo ships full of soybeans unable to be unloaded due to backups at Chinese ports are beginning to circulate around the trading floor. Rains in Brazil should help the soybean crops there while more rains in Argentina could delay the harvest there cutting into crop yields. Yesterday’s volume for soybean futures was slightly higher with open interest dropping by 4,823 contracts as funds liquidated some long positions."

Mike

[roarintiger1]

Thank you Mike.  Any information on this is appreciated.

[crophugger]

Sign of a bull market is one that opens lower and closes higher. Margin selling pressure pushes us higher??? Little squeeze in the pork ouch.

[c-x-1]

soybeans shipped = 1.355 b bu

soybean commits =  1.597 b bu

USDA carryout = 150 m bu

USDA export # = 1.510 b bu

155 m bu commits left to ship

up to 242 mil bu could be cancelled - or 6.5 mil ton...would put carryout at 305 m bu

if US ships rest of commits -- leaves carryout = 63 m bu - all other usage unchanged.

All i can say is S mkt has a delicate balancing act - 2nd half of yr. and it will continue to give clues to what it expects -- imo -most Traders don't "expect" anything - just watching for short term opportunity.

[highyields]

Just the way I'm looking at the May corn chart, if corn holds 10 higher, and closes higher tomorrow, $5.25 next upside,,,then the $5.40-$5.50 mark??    

Thoughts??  comments??    

I would imagine $5.40 would be a place to aim for since that is the 1996 high, or close to it.   

[c-x-1]

....and $5.50 or so is where lower continuation gap starts from last Aug.

[farmerguy89]

Holy moley 5.50+ basis= 5.75!