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marketeye
Veteran Advisor

Floor Talk May 9 (Report Day)

At the close:

The July corn futures contract closed 8 3/4 cents lower at $5.07. The Dec. corn futures finished 12 cents lower at $4.99. The July soybean futures contract settled 17 1/2 cents higher at $14.87. The Nov. soybean futures finished 2 cents higher at $12.26. July wheat futures closed 12 3/4 cents lower at $7.22 per bushel. The July soymeal futures contract ended $6.60 per short ton higher at $487.30. The July soyoil futures finished $0.06 higher at $41.18. 
In the outside markets, the Brent crude oil is $0.24 per barrel lower, the dollar is higher and the Dow Jones Industrials are 9 points lower.

 

Mike

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At mid-session:

The July corn futures contract is trading 2 cents higher at $5.16. The Dec. corn futures are trading 1 cent higher at $5.10. The July soybean futures contract is 22 cents higher at $14.68. The Nov. soybean futures are trading 9 cents higher at $12.26. July wheat futures are 2 1/2 cents lower at $7.35 per bushel. The July soymeal futures contract is trading $7.40 per short ton higher at $482.30. The July soyoil futures are trading $0.28 higher at $41.11. 
In the outside markets, the Brent crude oil is $0.76 per barrel lower, the dollar is higher and the Dow Jones Industrials are 93 points higher.

 

Mike

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REPORT REACTION:

 

Mike North, Sr. Risk Advisor for First Capital Ag, says the biggest number of the morning was the 2014/15 World Corn Ending Stocks which was projected at 181.7 million metric tons and outsized even the biggest guess of 175 MMT.  "Digging deeper, this number becomes possible through increased production as well as growth in 2013/14 World Corn Ending Stocks by 10 MM tons.  Interestingly, world old crop supplies grew even with a 185 Million bu reduction in domestic supplies (ethanol usage was raised by 50 Million bu and exports were lifted another 150 Million bu).  Obviously, to make all of this work, we must also get the 91.7 million acres that are forecast to be planted AND the 165.3 bushel yield that is being penciled in.  However, reductions in either of these numbers become less important as this very elevated 181.7 number gives us a lot of wiggle room.  Bottom line – the world is not running short of corn supply."
 
Soybeans played hokey pokey with their balance sheet.  25 million bushels were added to imports, 20 million bushels were added to exports.  Sprinkle in a 10 million bushel increase in crushings and you suddenly have gone through a lot of changes to result in only a 5 million reduction in ending stocks.  From there, the story follows in much the same vein as corn – world ending stocks grew by 15 MMT.  This will weigh on soybeans as we work through the year and largely justifies the near $3/bushel spread between old crop and new crop.
 
Wheat saw reductions that were slightly deeper than the average guess.  After adding all classes together, we ran short of the guess by 80 million bushels, with more than half of that coming from the losses in Hard Red Winter Wheat.
 

--Peter Meyer, PIRA Energy Group, Senior Grain Analyst, says the 2013-14 corn export figure of 1.9 billion  bushels is good if realized. But, with as many unshipped exports that are backed up, he's not sure if we can reach expected shipped export levels. I think the corn yield of 165 bu./acre for this year is fair. For soybeans, the import number makes sense. And then regarding global soybean carryout, I think folks need to be aware that it could reach over 90.0 mmt after 2014-15. You need to be aware of this."

Regarding wheat, the fact is the world is sitting on a lot of wheat."

 

--Sal Gilbertie, Teucrium Trading: Today’s report shows a much improved balance sheet for soybeans across the globe; this has been a long time in coming is welcome news to consumers and end users of all soy related products. Anticipated corn yields are surprisingly high vs industry expectations, boosting expectations for a healthy 2014/15 carry out. Planting progress over the next three weeks will be closely watched to see if the USDA yield estimates can hold for the coming year. Feed related demand for corn may be underestimated, especially when one factors in a slight increase of the wheat to corn price ratio based upon USDA projections for the coming crop year. Ethanol use may also be underestimated given current strong margins in that industry due mainly to stubbornly high gasoline prices. The United States’ sharp expected decline in winter wheat production adds to a general tightening of the domestic wheat balance sheet, but global supplies and stocks remain adequate.

 

--One analyst says, "They recognize the US HRW issue which does not bode well but on the demand side they increased old crop exports 10 mb, SWW and HRS, new crop demand they have exports at 950 mb which is ok but FEED AND RESIDUAL AT 170 ?  With these flat prices,?
 
Big world stocks/production."

 

USDA/WASDE Report:

 

U.S. 2013-14 Stockpiles

 

Corn= 1.146 billio bushels vs. the trade's average estimate of 1.316 billion bushels and USDA's April 1.331 bill.

 

Soybeans= 130 million vs. the trade's average estimate of 132.2 million bushels and USDA's April 135 mill.

 

Wheat= 583 million bushels  vs. the trade's average estimate of 586 million bushels and the USDA's April 583 mill.

 

2014-15 Stocks:

 

Corn= 1.726 billion bushels   vs. the trade's avg. estimate of 1.618 billion bushels.

 

Soybeans= 330 million bushels  vs. the trade's avg. estimate of 299 million bushels.

 

Wheat=  540 million bushels vs. the trade's avg. estimate of 540 million bushels.

 

2014 U.S. Yields

 

Corn= 165.3, equal to Ag Outlook estimate.

 

Soybeans= 45.2 bu./acre vs. the trade's 44 estimate.

 

Wheat= 42.7 bu./acre vs. the USDA Ag Outlook estimate of 44.0.

 

What do you think about today's report?

 

Mike

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At 10:22am:

Corn has creeped into positive territory, while soybeans remain mixed and wheat lower.

 

Mike

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At the open:

The July corn futures contract is trading 1 cent lower at $5.15. The Dec. corn futures are trading 1 cent lower at $5.10. The July soybean futures contract is 1 cent lower at $14.68. The Nov. soybean futures are trading 2 cents higher at $12.26. July wheat futures are 7 cents lower at $7.27 per bushel. The July soymeal futures contract is trading $2.10 per short ton lower at $478.60. The July soyoil futures are trading $0.29 higher at $41.40. 
In the outside markets, the Brent crude oil is $0.55 per barrel higher, the dollar is higher and the Dow Jones Industrials are 3 points lower.

 

Mike

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At 8:20am:

Argentina's soybean crop estimates should be raised, according to the Buenos Aires Grains Exchange. It increased its 2013/14 Argentine soy- bean estimate by a million tonnes Thursday, to 55.5 mmt, due to stronger yields. It noted that 64% of the crop has been harvested, down 15% from last year. The corn harvest was estimated as 28%, down 12% from last year’s pace.

 

Mike

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At 7:00am:

Early calls: Corn is seen 1-2 cents lower, soybeans 1-2 cents higher , and wheat 5-7 cents lower.

Trackers:
Overnight grain, soybean markets=Trading mostly lower.

Brent Crude Oil=$0.62 per barrel higher.
Dollar= Higher.

Wall Street=Seen lower, as U.S. monthly hiring and labor market reports are released.

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

 


More in a minute,

 

Mike

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8 Replies
giolucas
Veteran Advisor

Re: Floor Talk May 9

Too quiet before the storm. 

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Farmerjoe79
Senior Contributor

Re: Floor Talk May 9

Beans and corn are going limit down.
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Hobbyfarmer
Honored Advisor

Re: Floor Talk May 9

I've had corn make less than beans but as a national average?

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marketeye
Veteran Advisor

Re: Floor Talk May 9 (Report Day)

With the report out, now the market turns its focus back to weather and planting progress. Here is a compilation of ideal corn planting dates for the Midwestern corn states and the yield percentage potential:

 

Corn    

          Mid-Late April    Early-Mid May    Mid-Late May    Early-Mid June    Mid-Late June    
Illinois    100%                     97%                     85%                   70%                   50%
Indiana                                                                                                                        
Iowa        100%                    97%                     85%                   70%                  50%
Nebraska    100%                 97%                     85%                  70%                  50%

 

Sources: ISU, U of I, Purdue Univ., Univ. of Neb.-Lincoln

 

Still trying to collect the same information for ideal soybean planting dates.

 

Mike

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roarintiger1
Honored Advisor

Re: Floor Talk May 9 (Report Day)

The fact that folks have this 165 bushel per acre corn crop in the bin is laughable.......no.....it's plain sad. But I guess we live in a nation that has not gone without anything for a long, long time.

,

I find it interesting that the world ending corn stocks prediction is as high as it is.......less acres and production in Brazil, less acres here in the US, and prehaps even less acres do to some acres not getting planted, plus the turmoil in the Ukraine (16% of the world's exportable corn supply).     Just seems like we are counting the chickens long before they are hatched......Wait, which do you count first.......the chickens or the eggs?  Maybe Hobbyfarmer can tell us?

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Hobbyfarmer
Honored Advisor

Re: Floor Talk May 9 (Report Day)

Rt; has to be "eggs" since they are not yet hatched.

 

Personally I think it is " pie in the sky" .  They also tend to overestimate production and underestimate demand/use on a fairly consistent year to year basis.

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WCWISC
Veteran Contributor

Re: Floor Talk May 9 (Report Day)

When the good ol' USDA prints bullish numbers, the trade doesn't believe them. But when it's bearish..........."OH BOY! We're gonna be swimming in grain for years to come!" One word comes to mind......... sell sell sell sell sell sell sell!!!!! Lol!
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Longcreekfarms
Senior Contributor

Re: Floor Talk May 9 (Report Day)

The chicken and the egg are both laying in bed, smoking cigarettes. Which came 1st? 🙂
And ditto to what Hobby said. It's become expected that the USDA shoots for the moon. Hard to estimate yield when a lot of it is still in the bag.
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