Floor Talk, May 14, 2019
Beans Jump Up 35¢. Wow!
At the close, the July corn futures finished 12 1/4¢ higher at $3.68 1/4. Dec. corn futures ended 11 1/4¢ higher at $3.87 3/4.
July soybean futures ended 29¢ higher at $8.31 1/2. November soybean futures closed 29¢ higher at $8.56 1/2. At one point, in the day, the Nov. contract was up as much as 35¢.
July wheat futures finished 11 1/2¢ higher at $4.48 1/2.
July soymeal futures finished $10.70 per short ton higher at $298.00. July soy oil futures closed $0.39 cent higher at 27.00¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.82 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 341 points higher.
At midsession, the July corn futures are 13¢ higher at $3.69 1/4. Dec. corn futures are 11¢ higher at $3.88.
July soybean futures are 29 1/2¢ higher at $8.32. November soybean futures are 29 3/4¢ higher at $8.57 1/4.
July wheat futures are 9 1/4¢ higher at $4.46 1/2.
July soymeal futures are $10.40 per short ton higher at $297.70. July soy oil futures are $0.39 cent higher at 27.00¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.93 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 331 points higher.
Are you seeing endusers, in your neighborhood, backing off of their basis offers?
What's going on with this rally? Here's what one Chicago trader tells me.
A grain trader in Chicago, choosing anonymity, says the market rally revolves around investors that have been holding the record-short positions in corn and wheat are buying those shorts back.
"We’re seeing record short speculative open interest. It’s a massive short squeeze. Yes, the rally is all about market position. Plus, China headlines hitting the tape as we speak, don’t know what to trust with Trump and Xi, but hearing dialogue ongoing with China right now. Market may know something and shorts getting squeezed. This is ultimate pain for market shorts," the grain trader says.
In early trading, the July corn futures are 11 3/4¢ higher at $3.68 1/4. Dec. corn futures are 10 1/4¢ higher at $3.86 1/4.
July soybean futures are 21 1/2¢ higher at $8.24. November soybean futures are 21 1/2¢ higher at $8.49 1/4.
July wheat futures are 10 1/4¢ higher at $4.47.
July soymeal futures are $4.60 per short ton higher at $291.90. July soy oil futures are $0.37 cent higher at 26.98¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.65 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 188 points higher.
Al Kluis, Kluis Advisors, says that investors have been ignoring the slow planting pace of corn.
“The trade has been ignoring the slow planting pace for corn and the slow emergence of corn. The focus is all on the trade war. With only 30% of the nation’s corn planted, I am taking my projections for planted corn acres down by 2 million acres. I am also taking the 2019 corn yield down by 2 bushels per acre because of slow planting and emergence,” Kluis told customers in a daily note.
Kluis added, “I am watching the extended forecasts and trying to figure out how much corn can get planted in four or five days before the next rain system moves through. If nationwide corn planting does not reach at least 50% by next Monday, then I will take my acreage and yield projections lower again.”
Private exporters reported to the U.S. Department of Agriculture export sales of 180,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
The marketing year for soybeans began Sept. 1.
What say you? Is the unknown buyer China?
Re: Floor Talk, May 14, 2019
A movie title comes to mind to describe the trade's view of this situation....
LA LA LAND!
The science is bizarrely clear, corn yields decline 1.2 bu/day if planted
after May 10th. Thus 70% of the crop is most assuredly giving away 1.2 bu/day
or .85 bu/ac (70% of 1.2) per day (for the math challenged that is 5.9 bu per week)
Thus, reducing the national yield from 177 to 175 as Al suggests
is just, well, LA LA LAND....raining in IL as we speak, huge rain forecast
5 days out....this is becoming historic right before our very eyes 🙂
A much more valid reduction statistically in yield would be down to 170. (177-7).
Yes, there are other ways to calculate the impact, but none of them would
get such a small reduction of 2 bu/acre. (ie deviation from average, which
would be 32% of the crop x 1.2 = .4 bu/day or 2.7/week, but that assumes
we would plant 30% of the crop this week which clearly is not going to
happen with no wheels turning in C-IA, or east of the MS river.)
Econ fellow out of IL just said on the radio, "we could still grow a very large
crop". Well, yes, if the future is perfect (just a quick point....the future is
seldom perfect 2 years in a row, let alone the 6 they are counting on)
I still call him out....LA LA LAND....if you want to use statistics to project
a 177 crop back in February....you have to still use the statistics...yields
are going down 1.2 bu/day....
Alas, one of these days I won't have any time to dribble away here.
Maybe....nothing will move here before Thursday and it is supposed
to rain Thursday...perfectly TIMED..... 🙂
Re: Floor Talk, May 14, 2019
And another LA LA LAND moment, this is CERTAINLY NOT a SHORT SQUEEZE....
how is possible to squeeze a short when every single position he has is still at a profit!
That guy must be under 28, the last real short squeeze in any grain was in 2012.
Yep, when corn had an 8 in front of it, not a 3...
Yes, there were a few professors at Purdue that did not like my prescence in class
and, no I'm not much fun at parties
Re:It may not be a "short squeeze" per say but..
It may not be a "short squeeze" per say but the holder of those shorts is watching his profit evaporate right before his eyes and it may be making him nervous. He might be thinking that it's a good time to book some of that profit instead. And then once the momentum gets going, stampede.
Re: Re:It may not be a "short squeeze" per say but..
The squeeze currently on is like a hug from a two year old. Come back a tell me again after the squeeze is more like a hug from your not-so-favorite aunt.