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Veteran Advisor

Floor Talk May 17

At the close:

The July corn futures closed 5 cents higher at $6.25, while the Dec. contract finished 2 cents higher at $5.28 1/4. The July soybean contract settled 16 cents higher $14.38, while the Nov. 2012 contract ended 4 1/4 cents higher at $13.06 1/2. The July wheat futures ended 19 cents higher at $6.57 1/2. July soyoil futures settled up $0.29 at $50.72. July soymeal futures closed $3.00 at $428.00. 
In the outside markets, the N
YMEX crude oil is $0.26 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 91 points.

 

Mike

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At mid-session:

The July corn futures trade 1 cent lower at $6.19, while the Dec. contract trades 1/2 of a cent higher at $5.26 3/4. The July soybean contract is trading 15 cents higher $14.37, while the Nov. 2012 contract trades 8 3/4 cents higher at $13.11. The July wheat futures are trading 8 3/4 cents higher at $6.47 1/2. July soyoil futures trade up $0.29 higher at $50.72. 
In the outside markets, the N
YMEX crude oil is $0.04 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 90 points.

 

One analyst says the fresh demand news Thursday is supporting the markets.
"Soybeans are up on the China purchase.  The fact that China bought old crop, after buying so much new crop in recent tenders, helped the markets go higher," he says.
At mid-session, the markets are starting to fade. "It is possible that between yesterday and today the news is in the price now.  If so, the market can fade more," he says.
Specs were buying early but not so much now, he says.
 
Wheat is up on weather concerns in the U.S. and in Russia/Kazakhstan. That seems to be pretty much spec-buying there, he says.  
"Corn is quiet, with not much direction either way. But, if beans and wheat hold, corn will have to come back," he says.

 

 

Mike

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Mike

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At 10am:

Old-crop beans are up 20 cents this morning, while the new-crop contract is up 6 cents. Well, it's official, the CME Group announced Thursday that it will formally request extended trading hours from its original 22 hour proposal to 21 hours.

 

In a press release Thursday, the CME Group stated:

"What sets CME Group apart is our close working relationship with the grain industry, who have made our grain and oilseed futures the benchmark risk management products," said Tim Andriesen, Managing Director, Agricultural Commodities and Alternative Investments, CME Group. "That's why, in response to significant feedback for this customer segment, we're further amending CBOT grain and oilseed trading hours to 5 p.m. to 2 p.m. CT Sunday through Friday. They have clearly communicated that these hours best meet their risk management needs."

 

Mike

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At the open:

The July corn futures trade 1 1/4 cents higher at $6.21, while the Dec. contract trades 1 1/4 cents higher at $5.27 1/2. The July soybean contract is trading 19 cents higher $14.41 1/2, while the Nov. 2012 contract trades 10 cents higher at $13.12. The July wheat futures are trading 10 cents higher at $6.49. July soyoil futures trade up $0.29 at $50.72. 
In the outside markets, the N
YMEX crude oil is $0.52 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 47 points.

 

Mike

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At 8:45am:

It's  being reported that the CME Group has filed a request with the CFTC to change their extended trading hours proposal from 22 hours to 21. As a result, the start of the trading hour change, scheduled for this Sunday night, will be delayed. This is the second time this extension of trading hours has changed.

 

Mike

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At 8am:

--USDA announces fresh soybean and wheat sales. China buys 480,000 mt of U.S. soybeans for 2011-12 delivery.

--USDA announces that Iraq buys 100,000 mt of U.S. HRW wheat for 2012-13 delivery.

 

Mike

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At 7:30am:

USDA releases mild-to-weak Weekly Export Sales for corn and soybeans Thursday.

 

Corn=865,100 mt of sales vs. the trade's expectation of 800,000-1.4 million metric tons.

Soybeans=663,400 mt of sales vs. the trade's expectation of 1.1 million-to-1.6 mmt.

Wheat=711,400mt vs. the trade's expectation of between 400,000-800,000 mt.

 

What do you think? Do the numbers surprise you?

 

Mike

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At 6:50am:

--Japan bought 158,783 mt of U.S., Canadian, and Australian milling wheat Thursday.

--Japan bought 500,000 mt of South American corn. Japan has only covered 25% of its corn needs for the July-Sept. time period. It is waiting for a cheaper market, during the fall U.S. harvest, according to the Dow Jones Newswire story.

 

Mike

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At 6:45am:

USDA will release its Weekly Export Sales this morning at 7:30.

 

FWIW: One floor trader says, “During 2011, China would step into the corn market and buy when the front-month contract was trading in the low $6.00 per bushel range. Recently, prices have been 25-30 cents lower than that.
Meanwhile, the trade is not convinced about recent USDA upward carryout revisions at 850 million bushels. Especially with China active in the market, as of late. The question is whether everyone is covered through mid-to-late August? And, is there enough old crop?
For now, it looks like China is putting support under $6.00 old-crop corn. China seems to have interest in new-crop corn too. A month ago, the trade was talking about Chinese reserves were lower than expected. So, are they buying to restock reserves?”

 

Mike

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At 6:40am:

Early calls: Corn 2-3 cents higher, soybeans 10-12 cents higher, and wheat 1-2 cents higher.

 

Trackers:
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.09 per barrel higher.
Dollar=Higher.
Wall Street=Seen mixed ahead of U.S. jobless data.

World Markets=Asia/Pacific mixed, Europe stocks are lower.

 

 

More in a minute,

 

Mike

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23 Replies
Honored Advisor

Re: Floor Talk May 17

Stewart-Peterson Market Commentary

Close - May 16, 2012

Corn

CORN HIGHLIGHTS: Corn futures had a banner day with solid gains of 10 to 22-3/4 as July led the way higher. A strong surge in wheat prices, along with significant short-covering in these two markets provided underlying support. Perhaps more importantly, is continued dry weather concerns in Europe for wheat, as well as a southern third of the Corn Belt. China was a noted buyer of 900,000 tonnes today, this was considered bullish. SUMMARY: Farmers have had an excellent start to the planting and growing season. Yet, many we've talked to today have suggested that they are in need of rain and this will be a continued requirement on a daily basis considering temperatures are beginning to rise and there doesn't appear to be much, if any, rainfall in the immediate forecast.

Soybeans

SOYBEAN HIGHLIGHTS: Soybean futures finished mixed as bull spreading was noted. Nearby July closed 9 higher at 14.22 while new crop Nov closed down 2-3/4 at 13.02-1/4. Short-covering by funds on the heels of sharply higher corn and wheat prices helped provide underlying support, as did another small sale to China. The bean market's been under heavy technical pressure lately on overbought conditions from last month and news that China would be releasing 3 mmt internally. Nonetheless, the bean market is now probably undervalued and due for a correction. If you're looking to sell cash, we argue presently to be patient. We think there will be better opportunities in both old and new crop.

 

Wheat

WHEAT HIGHLIGHTS: Wheat futures surged on growing concerns that parts of Europe and Russia will come under a wave of hot temperatures. In addition, U.S. crop ratings dropped 3% out of the good and excellent category yesterday and a lack of moisture in parts of the South and West is suggesting that HRW yields could be on the decline. Significant short-covering ensued as prices broke through overhead resistance. Prices pushed to the 21, 40, and 50-day moving averages today, the first time they have been back above these levels since May 1. While the overall trend is still down, it's hard to argue that prices can make a big turnaround with general crop ratings remaining good-to-excellent. However, the market's going to focus on whether the crop is getting bigger or smaller, and as of today it believes that both the U.S. and world crops are getting smaller.

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Honored Advisor

Re: Floor Talk May 17

The wheat crop in NW kansas is getting smaller by the hour. HOT, DRY, WINDY not good for bumper crops.

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Senior Contributor

Re: Floor Talk May 17

just from what the radio has been saying west of Lincoln Ne I hear that pivots are running already. 

I went to go pick up my last of the soybean seed last night and the seed dealer told me that his neighbor had his pivot on, he lives south of me about 40 miles and can get water there. 

We have to watch so we don't work the ground to far in front of the planter because of fears of drying out the ground to much.  

Right where I live we had more rain then a few others around so I imagine its getting really dry in some areas.  

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Veteran Advisor

Re: Floor Talk May 17

The farm markets are not impacted. But, the "99%-ers" are protesting this week outside of the buildings in Chicago's financial district. Because two traders were hit in the head with bags filled with human feces yesterday, the traders are being asked to not wear their trading jackets outside of the building.

 

Mike

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Senior Contributor

Re: Floor Talk May 17

If I had to guess as to why those pivots are running, it is because those fields were recently sprayed and the chemical needed to be activated.  We're a little dry here, but we won't need to fire up the pivots other than to activate chemical for a while. 

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Senior Contributor

Re: Floor Talk May 17

Mike, I hope the protesters don't stain Shelly's nice black and white sport jacket.

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Honored Advisor

Re: Floor Talk May 17

What would those guys get if they were wearing USDA jackets?

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Frequent Contributor

Re: Floor Talk May 17

Hot, dry and windy here today, gray dust haze in the air, makes me wonder what the markets will do if this continues very long?  Not much of a chance of rain either.....

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Highlighted
Contributor

Re: Floor Talk May 17

In northeast Nebraska every pivot is on! Started irrigating corn last week. This week the beans are getting watered. I do not know any neighbor that has not started irrigating.

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