Floor Talk May 6

[marketeye]

After the close:

On Friday, the USDA will release updated estimates on U.S. and World Stockpiles and South America Production.

See full pre-USDA Report estimates at here.

Mike

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At the close:

The July corn futures contract closed 9 1/2 cents higher at $5.17. The Dec. corn futures finished 9 cents higher at $5.09. The July soybean futures contract closed 3 3/4 cents lower at $14.59. The Nov. soybean futures finished 2 1/4 cents lower at $12.25. July wheat futures closed 10 cents higher at $7.39 per bushel. The July soymeal futures contract finished $1.20 per short ton lower at $477.50. The July soyoil futures settled $0.06 lower at $41.11. 
In the outside markets, the Brent crude oil is $0.44 per barrel higher, the dollar is lower and the Dow Jones Industrials are 117 points lower.

Mike

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At 1:20pm:

Because the markets are keeping an eye on the Ukraine/Russian tensions, I reached out to our Ukrainian source to get an update on the situation. He says, "I am sure that there will be no war. But the risk of the serious riots and turmoil is really very big. Though Putin is mad and anything may happen."

Mike

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At mid-session:

The July corn futures contract is trading 7 cents higher at $5.15. The Dec. corn futures are trading 7 cents higher at $5.07. The July soybean futures contract is 8 1/2 cents lower at $14.54. The Nov. soybean futures are trading 3 1/2 cents lower at $12.24. July wheat futures are 9 3/4 cents higher at $7.38 per bushel. The July soymeal futures contract is trading $4.80 per short ton lower at $473.90. The July soyoil futures are trading $0.10 higher at $41.27. 
In the outside markets, the Brent crude oil is $0.81 per barrel higher, the dollar is lower and the Dow Jones Industrials are 72 points lower.

Alan Brugler, President Brugler Marketing & Management LLC, says wheat is pulling corn up.   "Bean market appears comfortable with supply, notice the delivery notices against May.   Still think there might be a squeeze against May at the end of the delivery cycle."

Mike

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At 10:40am:

Corn and wheat have turned higher, while soybeans remain off double-digits. At mid-session, one risk advisor explains the markets this way: "The soybean market is certainly being weighed on by continued discussion of cancellation of soybeans by China and a redirect of those shipments to US shores.  The technical picture also weakened as the $15 threshhold was violated.  The July will find support in the $14.40 region though, so follow that closely.  Corn and wheat are continuing the conversation of the current weather scenarios…too much sunshine in the Southern Plains, not enough in the Northern Corn Belt.  Add to that some Ukrainian violence and you have created a nice recipe for a bid in those two markets."

Mike

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At 9:25am:

--USDA announces Tuesday that an unknown has canceled 120,000 ton purchase of U.S. corn for 2013/14 marketing year.

--USDA announces Tuesday that Spain has canceled a previous purchase of 100,000 tons of U.S. corn for 2013/14 delivery.

Mike

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At the open:

The July corn futures contract is trading 5 cents lower at $5.02. The Dec. corn futures are trading 4 cents lower at $4.96. The July soybean futures contract is 17 cents lower at $14.45. The Nov. soybean futures are trading 9 cents lower at $12.18. July wheat futures are 3 cents lower at $7.26 per bushel. The July soymeal futures contract is trading $6.60 per short ton lower at $472.10. The July soyoil futures are trading $0.01 lower at $41.16. 
In the outside markets, the Brent crude oil is $0.01 per barrel higher, the dollar is lower and the Dow Jones Industrials are 32 points lower.

Mike

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At 6:40am:

Early calls: Corn is seen 1-2 cents lower, soybeans 10-12 cents lower , and wheat 1-2 cents lower.

Trackers:
Overnight grain, soybean markets=Trading lower.

Brent Crude Oil=$0.01 per barrel higher.
Dollar= Lower.

Wall Street=Seen higher.

World Markets=Europe stocks were mostly lower, Asia/Pacific stocks mostly lower.

More in a minute,

Mike

[marketeye]

Floor Talk on this Friday's USDA Report. This came to me, this morning.

"After really looking at the house by house (report estimates) breakdown combined with trader commitments, I think there is a 25% probability of a bullish report (75% bearish):
 
There are too many people looking for a 125 old crop # in beans coupled with a huge long in the SN/SX
If USDA delivers140mb, it could break that down to the 100 MA ($189 currently)  
 
Also a 300 consensus for SX leaves big potential for a bearish new crop since 7-8m acres went to prevent plant last year and that leaves the market open to the USDA putting more acres into both crops    
 
I think the market will stay around here until Friday (SX $12.18) which will really make a negative report much more dramatic since the funds look like they are going to stay put into the release.
If these #'s are 140+ and 350+ who is going to take the selling?"

Now that you have heard from the floor, what do you think about this Friday's report?

Mike

[cyclonegrain]

This situation in the HRW growing area is obliviously serious, especially to those that have a front row seat.  However, HRW stocks in North America are in good shape with Canada sitting on a pile (47% more than one year ago) that will cover needs.  I really don't think that the big money traders pay much attention to what producers are talking this time of year.  We did this last year with the late planting doom and gloom and we ended up with record production on the 3rd largest trend line yield ever?  Basis is and will likely stay very weak.  In SWMN the CASH price has only gained $.30 cents since the contract low prior to the January report due to basis collapse.  Today in SWMN and NWIA the corn planting is winding down for the most part and many are onto bean planting.  We are starting to see cancellations of corn with more likely to come.  Sales are at 97%, but shipments are well behind.  I dought the 40% left to ship (of existing sales) can be moved in the next 4 months with continuing rail issues.  Lots of corn left on the farm around here and many elevators still with piles that don't look so great.  Can't believe that getting some hedged (maybe buy puts?) up above insurance guarentee is a bad idea.  Remove some risk?  For those of you not doing anything, what is your plan IF things fall apart due to continued cancellations or rolls to new crop of soy and corn, additional planted acreage, normal to better summer weather? 

[Hobbyfarmer]

My plan is for more trips to the elevator for less $ and pay less taxes and get on that subsidized health-care. Oh and hoard beans.

[marketeye]

cyclonegrain,

Great post. I appreciate your relevant comments and insight into the planting pace and cash market in your area. Thanks for stopping into Marketing Talk. Keep it up.

Mike