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05-23-2012 06:24 AM - edited 05-23-2012 02:50 PM
After the close:
Ethanol production, for the week of May 18, averaged 919,000 barrels per day (b/d) – or 38.58 million gallons daily, according to EIA data. That is up 15,000 b/d from the week before. The 4-week average for ethanol production stood at 903,000 b/d for an annualized rate of 13.85 billion gallons. Stocks of ethanol stood at 21.4 million barrels.
At the close:
The July corn futures settled 7 cents higher at $6.04, while the Dec. contract closed unchanged at $5.22. The July soybean contract finished 18 cents lower $13.64, while the Nov. 2012 contract settled 27 1/4 cents lower at $12.55. The July wheat futures closed 20 1/2 cents lower at $6.65. July soyoil futures settled $1.56 lower at $48.90. The July soymeal futures ended $0.60 per short ton higher at $405.60.
In the outside markets, the NYMEX crude oil is $1.85 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 114 points.
Oil World, the German consultancy, is estimating U.S. soybean stocks to fall 17% by the end of August, more than the latest estimates. This decline is due to the increase in Chinese demand, according to Oil World. Stocks are expected to fall from 5.85 million to 4.85 million tons.
The July corn futures trade 9 1/2 cents higher at $6.06 1/2, while the Dec. contract trades 1/4 of a cent higher at $5.22 3/4. The July soybean contract is trading 19 cents lower $13.63 1/4, while the Nov. 2012 contract trades 21 cents lower at $12.61 1/4. The July wheat futures are trading 10 3/4 cents lower at $6.74 3/4. July soyoil futures trade down $1.15 at $49.31. The July soymeal futures are trading $0.70 per short ton lower at $404.30.
In the outside markets, the NYMEX crude oil is $1.37 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 182 points.
Alan Brugler, president of Brugler Marketing & Management LLC tells me, "The corn market is being supported by the wheat/corn spread.
"With wheat 65-70 cents over corn there won't be much fed this summer. That implies more feeding of corn that we do not have," Brugler says.
Chinese crush margins are negative, with soy oil the lowest since February this week, he says. "They have likely flooded their market with imported beans (trying to buy ahead against the global shortage) and need to slow down for a while and work those supplies into the system. Bean charts are ugly, encouraging fund traders to continue to liquidate money losing long positions," he says.
At the open:
The July corn futures trade 4 cents lower at $5.93, while the Dec. contract trades 6 1/4 cents lower at $5.15 3/4. The July soybean contract is trading 29 cents lower $13.54, while the Nov. 2012 contract trades 23 cents lower at $12.58 3/4. The July wheat futures are trading 15 cents lower at $6.70 1/2. July soyoil futures trade down $0.90 at $49.57. The July soymeal futures opened $5.90 per short ton lower at $399.10.
In the outside markets, the NYMEX crude oil is $0.59 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 141 points.
The trade talk Wednesday focuses around the wetter Midwest weather outlook and corn hovering the $6.00 per bushel mark. It's been said before, when corn reaches or dips below $6, China reappears as a buyer. Let's see if that happens or if they think the corn wagon is going to get even more flat tires.
--S. Korea millers plan to buy 550,000 mt of feed wheat in the the next few months for Ovt.-Dec. arrival. However, if corn prices fall further, less wheat will be purchased, according to the Dow Jones Newswire story Wednesday.
--It looks like the U.S. soybeans are competitive on the world market. See the Dow Jones Newswire story Wednesday on China buyers canceling Brazil soybean orders.
Early calls: Corn 3-6 cents higher, soybeans 13-15 cents lower, and wheat 13-15 cents lower.
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$1.00 per barrel lower.
Wall Street=Seen lower ahead of Europe's summit. Growing fears that the euro zone will not be able to piece together a deal to curb Greece's debt crisis is sending world stocks lower Wednesday.
World Markets=Lower on Greece worries.
More in a minute,
05-23-2012 07:27 AM
Wow, nothing like going from drought on monday to widespread rain on tuesday! You gotta wonder how much these weather men participate in commodities when they can dramatically move the markets simply by changing the forecast......
Wrapped up replanting hailed out beans, now we are in a flash flood watch today! Checked the corn stand on a nieghbors field that didn't look too good and it was only 18 thousand population. Too much crust from last times 3+ inches of rain and cool temps, then hot and dry baked the crust hard. But......It will still make an above average crop, isn't this new technologically advanced seed great! Half a stand and we will still bust the bin!
05-23-2012 07:29 AM
too close for comfort,
I think what usually happens is something like this: China cancels, the seller (in this case Brazil), threatens some penalty, and then China comes back with a claim that the bean shipment was tainted and violates some import regulation. Or, China will put a trade barrier on Brazil's cotton, or on some other commodity. China always seems to trump whatever the seller's reaction may be. In the end, China remains with the upperhand, the seller crawls away with its tail between its legs. Sound familiar?
05-23-2012 07:37 AM
So yesterday China cancels orders because they found they could buy beans cheaper from the US.....Why is that bad news for the US bean market?
Howcome when I put in an order to deliver corn to an elevator at a set price and the price goes up before I deliver, I can't just call and cancel my order?
Am I missing something here?
05-23-2012 08:16 AM
There`s net chatter about the "administration" telling China to cancel and buy new crop cheaper. I`m over my head in the motives but would guess, keep food cheap with the thinner than admitted stocks in carryover. If that`s the case it`s kind of a reversal from the old "grain goes up in an election year" , now the kitchen sink is thrown at the market to drive it lower. Nothing surprises me anymore.
05-23-2012 08:45 AM
for the most part i think we are off to a good start in the new crop corn and beans if the old ussr continues to have good rain it could put more pressure on corn and wheat which it'll take beans with it. China got into trouble by buying too much now thier trying to get rid of it before prices tank.