Floor Talk November 11

[marketeye]

At the close:

The December corn futures settled 4 1/2 cents higher at $3.73 3/4 per bushel.

January soybean futures closed 38 1/4 cents higher at $10.64.

December wheat futures closed 8 cents higher at $5.25.

For Dec. soybean meal futures, the contract finished $19.70 per short ton higher at $400.60; Dec. soybean oil futures closed $0.51 higher at $32.87.

In the outside markets, the crude oil is $0.37 per barrel higher, the dollar is lower, and the Dow Jones Industrials are 16 points lower.

Mike

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At mid-session:

The December corn futures are trading  1/2 of a cent higher at $3.69 per bushel.

January soybean futures are trading 18 cents higher at $10.43.

December wheat futures are trading 1/4 of a cent higher at $5.17.

For Dec. soybean meal futures, the contract is $13.10 per short ton higher at $394.00; Dec. soybean oil futures are trading $0.33 higher at $32.69.

In the outside markets, the crude oil is $0.36 per barrel lower, the dollar is lower, and the Dow Jones Industrials are 3 points higher.

Jack Scoville, PRICE Futures Group vice-president, says the rally is coming from news that soybean meal basis is up again today, mostly in Memphis.  "Plus, the CONAB production estimates were below what we are trading as a market, even if the estimate was about unchanged on a month to month basis.  The cold weather is not a problem, the snow is, but I think the snow is generally above most of the important production areas.  CONAB left its bean production estimate about unchanged, which is what seems to have really created the buying.  The market seems supported by fund buying in beans and meal and not much else.  Producers here and in South America are quiet today.  Producers in both north and south remain slow sellers of beans, although SA producers are picking up the pace a bit.  Not so much here I don’t think.  Wheat and corn kind of dead, minnie-wheat getting supported by the cold and snow, not seeing any real demand news anywhere today. 

He adds, "It is a big time recovery in the beans. So, the shorts got to be scared after feeling a lot better about life yesterday.  But, no one really moving on either side except the funds."

Mike

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At 9:30 am:

The December corn futures are trading 1 3/4 cents lower at $3.67 per bushel.

January soybean futures are trading 9 cents higher at $10.34.

December wheat futures are trading 3 1/2 cents lower at $5.13.

For Dec. soybean meal futures, the contract is $5.40 per short ton higher at $386.30; Dec. soybean oil futures are trading $0.27 higher at $32.63.

In the outside markets, the crude oil is $0.24 per barrel lower, the dollar is lower, and the Dow Jones Industrials are 2 points higher.

Mike

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At 7:00am:

Early calls: Corn is 1-24 cents higher, soybeans 3-5 cents higher and wheat 1-2 cents lower.

Trackers:
Overnight grain, soybean markets = Trading mostly higher.
Brent Crude Oil = $0.43 lower per barrel.
Dollar = Higher
Wall Street = Seen higher with slow trade expected.
World Markets = Europe stocks were higher, Asia/Pacific stocks were higher.

Thanks to all Veterans. For those with us and those that have gone before us, it's recognized here, at least, that freedom is not free. In honor of all of you that answered the call of duty, I pause today to say thanks.

More in a minute,

Mike

[marketeye]

Now that the November USDA 'number' is behind us, the market will focus on South America's weather. Tonight, I will be joining an Al Kluis webinar with special guest Brian Willott, a Brazilian-based source, at 8pm. Since I'm looking at snow on the ground, outside of my window this morning, I guess I'll be talking about central Iowa farmers pushing through snowflakes to finish harvest. Brian will update everyone on South America's planting progress and growing progress.

You are invited to go to Alkluis.com and sit in on the webinar tonight. I've sat in before, when Brian was a guest. He is very interesting and is coming 'live' from Brazil. Hope you can join us.

Mike

[sw363535]

Thanks Mike --------- will try to be tuned in.

We are in our final week of corn harvest as well.

No snow ----- just bitter cold.  Like everyone else.

[glenlivet18]

Whoooo, got a live one today in soybeans.  Nice moves.

[sw363535]

Does the market have it's eye on filling that gap between 11.50 and 12.00?

[Hobbyfarmer]

Maybe just filling the next train/boat.

Bean sales might not pick up till there is a 179 improvement.

[luisvieira]

Hello boys,

Yesterday I saw an interview on a TV show with Roberto Rodrigues, former agriculture minister of Brazil. The interesting thing that he said is that the farm business worldwide and the grain market are living now the result of a bubble. Rodrigues explained that while demand exploded in China, other developing nations like Brazil gradually planted all they could with the support of speculators. He mentioned the developing nations because the impact in a poor country is higher. Let's say one small farmer in a poor country earns US$ 200/month. In two or three years with this international prices was possible to triple or even quadruble his income. So now the world is planting more than what the Asians need.

What do you guys think on this perspective? 

[sw363535]

Luis,

I am not ready to agree with the last sentence.  "So now the world is planting more than what the Asians need."

It might be true for acres or hectare,  we are certainly planting more area,  but demand keeps growing and much of the new  land in the US that is being planted is not dependable production and our irrigation capability continues to decline.  We are planting in drier and colder locations.  Looking at the last 4 years of production and consumption,  I think there is a struggle to keep up with each other--- comparing demand with production increases.  As we grow the US cattle herd back to desired numbers after the drought,  demand will increase in the US also.

Unfortunately we are not out of the drought problem yet in all areas of the US.  And we seem to slip in and out of that problem around the world.  

Costs of production are a big concern.  World wide we are struggling to keep up production.  Cheaper grain prices are not always coming from the competitive market place.  The pressures of Government interventions (like the argentine tax issue) and near Monopoly Business operating on the input supply side of costs are hurting the economic picture as well.

I think lower grain prices are going to lower production.  Something we are not used to in the US.  Our Government is not willing pay for surplus production like it has in the past to create excess supply.