Floor Talk November 28

[marketeye]

At the close:

The March futures corn contract settled unchanged at $7.64. Jan. soybean futures contract ended 3 cents lower at $14.46. March wheat futures finished 2 cents higher at $8.91 per bushel. The Jan. soyoil futures contract closeds $0.03 lower at $50.38. The Jan. soymeal futures contract finished $0.70 per short ton lower at $432.70.


In the outside markets, the NYMEX crude oil is $0.72 per barrel lower, the dollar is higher and the Dow Jones Industrials are 78 points higher.

Mike

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At mid-day:

At mid-day, the March futures corn contract is trading 1 cents higher at $7.65. Jan. soybean futures contract is trading 3 cents lower at $14.45. March wheat futures are trading 5 cents higher at $8.94 per bushel. The Jan. soyoil futures contract is trading $0.10 lower at $50.31. The Jan. soymeal futures contract is trading $0.10 per short ton higher at $433.50.


In the outside markets, the NYMEX crude oil is $1.20 per barrel lower, the dollar is lower and the Dow Jones Industrials are 77 points higher.

One analyst sizes the market up like this: "Pushing my longs out of December positions today, and a lot of talk that perhaps a short term correction is coming.  So far, though, no one seems real interested in doing much either way.  I think a move lower will probably find some pretty strong buying interest as I am trying to get my buy side guys covered on breaks and I am sure I am not alone.  Farmers are either in the house or workshop now or out hunting and not real interested in selling corn or soybeans, which is normal for right now.  I think we should rally a bit just on tight supplies.  Lots of talk about the river now, with people wondering how the market will react.  Hearing some basis weakness on the rivers now but not really anywhere else.  The Gulf seems a bit weaker after the big biz to China. So, I don’t think that is much.  So, all-in-all not a lot to talk about except feelings for direction, with some thinking weaker short term and higher longer term."

Mike

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At the open:

At the open, the March futures corn contract is trading 2 cents higher at $7.61. Jan. soybean futures contract is trading 3 cents lower at $14.45. March wheat futures are trading unchanged at $8.88 per bushel. The Jan. soyoil futures contract is trading $0.28 lower at $50.13. The Jan. soymeal futures contract is trading $1.20 per short ton higher at $434.60.


In the outside markets, the NYMEX crude oil is $1.55 per barrel lower, the dollar is higher and the Dow Jones Industrials are 16 points lower.

Mike

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At 8am:

--USDA announces Wednesday that China bought 290,000 mt of U.S. soybeans for 2012-13. WoW!

Mike

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At 6:55am:

--Ukraine will not implement a ban on wheat exports. That country's ag leaders have changed their minds. The ban was set for Dec. 1. They have checked the bins, again, and now say they have enough to continue to export, according the Dow Jones Newswire Wednesday. Separately, our Ukraine 'insider' tells me this morning, "The government desperately needs the hard currency to cover the huge budget deficit and to pay off its huge debts due next year. The metal and chemistry export is decreasing while the prospects of new borrowings are fading. So these guys decided to enable more wheat export for the time being. But it may be stopped any time they think they have found some other source of hard currency."

---Meanwhile, Russia is selling 62,640 tons of Intervention grain. Remember what we talked about yesterday. The more the Russians sell from the Intervention pile, the bigger the signal that they will eventuall ban exports.

--Japan announced Wednesday that it will probably get 30% of its feedcorn needs from Brazil in 2012-13. Japan bought 90% of their feedcorn from the U.S., for a long time. Since 2010, that figure has fallen to just 57% this year. For those that attended our Marketing Meet-up in Clear Lake, Iowa, remember the Brazilian contingent telling us that Brazil has a lot of corn?

Mike

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At 6:45am:

Early calls:  Corn up 1-2 cents, soybeans 2-4 cents lower, and wheat 2-4 cents lower.

Trackers:
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.54 per barrel lower.
Dollar=Higher.
Wall Street=Seen opening lower as investors remain concerned that Congress is far apart from agreeing on a 'fiscal cliff' resolution. The rhetoric is building. Today, look for new data from the new home sales report and the Beige book that reads economic conditions.

World=Asia/Pacific stocks are lower, and Europe's stocks are lower.

More in a minute,

Mike

[highyields]

is most of the corn from brazil grown in Southern Brazil??  Just read an artilce I believe it was oil world that parts of southern Brazil are 8-10 inches short on rain and only have 25% of water hold capacity in the soil at this time. 

[marketeye]

highyields,

No. Corn is raised throughout Brazil. The flatter land is in the north, the hillier land is in the south.

One Brazilian analyst made mention in a note to customers this week that South America needs at least two to three more quality rain events, before mid-Jan, to reach the USDA's latest production estimate of 148 mmts. 
"The weather right now looks very good for SA, aside from excessive wet areas in Argentina.  The southern tip of Brazil and Paraguay did get good rains this past weekend and should be in good shape for at least another 7-10 days without rain, with maps calling for rains there in the 6-7 day window," he says.

Mike

[Hobbyfarmer]

The biggest problem in Brazil is infrastructure to get the product to port.

@ $7+, corn can be hauled much farther than when it is/was $3.50 by truck.

That was a part of the presentation @ Clear Lake

There are plans for new highway systems and new rail lines going for a thousand miles.

The problem is most are in the planning stages and luckily for us 5+ years off.

In the mean time they have their hands full keeping what they already have in repair.

They also are increasing their confinement livestock production. = more internal use of feedstuffs.

[giolucas]

Maybe the Ukraine said they were no longer going to set the Ban so that prices can come down and they can purchase some for their inventory.  🙂  Wild guess on this game.