Floor Talk, May 22, 2019
At the close:
At the close, the July corn futures finished 1/4¢ higher at $3.94 1/2. Dec. corn futures closed 2 1/4¢ higher at $4.12 3/4.
July soybean futures finished 6 1/2¢ higher at $8.28 1/2. November soybean futures finished 6 3/4¢ higher at $8.55 1/2.
July wheat futures closed 6¢ lower at $4.72 3/4.
July soymeal futures closed $3.00 per short ton higher at $298.30. July soy oil futures ended $0.17 cent higher at 27.31¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.82 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 57 points lower.
At midday, the July corn futures are 1¢ higher at $3.95. Dec. corn futures are 2 1/4¢ higher at $4.12 3/4.
July soybean futures are 9 1/2¢ higher at $8.31. November soybean futures are 9 3/4¢ higher at $8.58 1/2.
July wheat futures are 3 3/4¢ lower at $4.75.
July soymeal futures are $4.70 per short ton higher at $300.00. July soy oil futures are $0.19 cent higher at 27.33¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.89 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 89 points lower.
A Chicago-based trader, choosing anonymity, says Tuesday’s news that President Trump’s government direct aid payments in the neighborhood of $2/bushel for soybeans and only 4 cents/bushel for corn is massive and should prompt farmers to plant more beans and less corn.
“With the current glut of beans, and Trump E-15 rumors in the market late day, this should bring more soybean selling and corn buying in the short term, barring substantial trade news progress which seems unlikely. Kansas City Wheat continues outperformance to the upside with short liquidations and lack of futures liquidity on rallies,” the trader says.
In early trading, the July corn futures are 1/2¢ lower at $3.93 3/4. Dec. corn futures are 3/4¢ higher at $4.11 1/4.
July soybean futures are 8 3/4¢ higher at $8.30 3/4. November soybean futures are 8 1/4¢ higher at $8.56 1/2.
July wheat futures are 4 3/4¢ lower at $4.74. July soymeal futures are $3.30 per short ton higher at $298.60. July soy oil futures are $0.11 cent higher at 27.25¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.67 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 51 points lower.
Al Kluis, Kluis Advisors, says that the slow planting progress brings up a lot of questions for investors.
“Traders are still trying to determine how all of the corn acres will get planted in the US. Of the acres that have been planted, we are getting reports that replants are occurring as emergence was terrible. This emergence problem will persist. The cool wet conditions we are experiencing will further hinder the development--and the production potential--of the US corn crop this year,” Kluis told customers in a daily note.
Kluis added, “The breakaway gap higher on Monday evening suggests short-term upside targets of $4.21 and $4.34. Momentum is overbought, however the forecast remains wet. All eyes will remain on the forecasts.”
Mike North, President Commodity Risk Management Group, says the soybean market is volatile, due to President Trump’s plan to pay producers $2.00 per bushel for China trade damage. However, corn still has the bullish story.
“Regarding the MFP 2.0 payment, there is no determined basis yet on production. Initially it was thought to be tied to 2019 production, but now it may be more a matter of 2019 plantings and some degree of historic yields. That is all up for grabs at this point. That did not slow the soybeans down from responding quickly to this news and departing quickly from their highs, yesterday,” North says.
North added, “Corn is still the anchor to the market as ongoing concern of lost acres and declining yields tear away at projected ending stocks. Technically, corn tested another level of resistance before coming off its highs. All in all, there is great uncertainty at this point. Expect volatility to continue.”
Re: Re:Planting progress vs yield
I'll take a stab at it. 6 million acre reduction and a 161 national average......this will give us a total supply of around 12.8 billion bushels.
This is certainly just a guess. A reduction of this magnitude would probably point to future prices being a tad higher than the $5.00 range with basis levels going much higher in areas that were hardest hit with corn acre reductions.
Re: say 150 to 155 bu national avg on
Say 70 million acres of corn harvested.
total in the 11 billion bu range for easy figurin.
granted If there's some hope of $4.60 and higher prices , the afore acres could go up to perhaps 75 million acres harvested.