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Veteran Advisor

Floor Talk, November 8, 2019 (Report Day)

At the close:

At the close, the Dec. corn futures finished 2¢ higher at $3.77 1/2. March corn futures finished 2 3/4¢ higher at $3.86 1/4.

Jan. soybean futures closed 5 1/2¢ lower at $9.31. March soybean futures ended 4 3/4¢ lower at $9.44.

Dec. wheat futures finished 2 1/4¢ lower at $5.10 1/4.



December soymeal futures finished $0.70 per short ton lower at $304.90.

 December soy oil futures closed 0.07 cents higher at 31.50¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.05 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 61 points lower.

Mike

--------------

At 11:15am:

USDA SAYS

In its November Supply/Demand Report, the USDA pegged the U.S. corn crop at 13.661 billion bushels, compared with its October estimate of 13.779 billion bushels and the trade’s expectation of 13.643 billion.

For yield, the USDA sees it averaging 167 bu./acre vs. the trade’s expectations of 167.5 bu./acre and the government’s October estimate of 168.4.

The U.S. soybean output is pegged at 3.549 billion bushels vs. the avg. trade estimate of 3.510 billion bushels and the USDA’s October estimate of 3.55 billion.

The USDA sees the U.S. soybean yield averaging 46.9 bu./acre vs. the trade’s expectation of 46.6 bu./acre and the USDA’s October estimate of 46.9.

Also, the USDA estimates the U.S. 2019 corn harvested acres at 81.8 million vs. the avg. trade estimate of 81.3 million and the USDA’s October estimate of 81.8 million.

The U.S. 2019 soybean harvested acreage has been printed at 75.6 million vs. the trade’s expectation of 75.4 million and the USDA’s October estimate of 75.6 million.

U.S. Ending Stocks 2019-20

The U.S. is expected to have 1.91 billion bushels of corn, at the end of August 2020 (the end of the marketing year).

That compares with the USDA’s October estimate of 1.929 billion bushels and the trade’s expectations of 1.799 billion.

For soybeans, the ending stocks are pegged at 475 million bushels, compared with the trade’s expectations 429 million bushels and the USDA’s October estimate of 460 million.

TRADE REACTION

--

Trade Reaction
--Sal Gilbertie, Teucrium Trading, says that today’s report is fairly benign.

“It shows a small decrease in corn yields and a slightly higher than expected soybean yield, offering little in the way of direction for the coming weeks,” Gilbertie says.

Gilbertie added, “Until the next WASDE report in December, soybean markets will be completely dependent on Chinese news, and corn markets may find some support on a slightly tightened global balance sheet. Harvest progress and trade talks will likely dominate the news cycle moving forward.”

--Bob Linneman, Commodity Broker, Kluis Commodity Advisor, says that the USDA gave the corn bulls a sliver of hope today when they cut yield to 167.  
“However, the USDA also cut demand. This cut was widely anticipated by traders, as exports remain sluggish.  With prices near the lows of the trading range over the last six weeks, I would not be surprised to see buyers step in,” Linneman says.

Linneman added, “The soybean market was expecting some form of bullish news from the USDA report, today.  Traders were surely disappointed when the USDA left production numbers unchanged from last month’s report. A small bearish adjustment to demand pushed stocks slightly higher, when the market was looking for a move in the other direction.”

--Greg Lumsden, Product Line Leader for Cargill on today’s WASDE.

"Heading into the report, the market has been largely rangebound weighing uncertainty of the report with the latest twists in trade negotiations. The Average trade guess was for a mildly supportive production number on both corn and beans. Traders were looking for an average reduction on the national corn yield of around 1 bu per acre down to 167.5. While the official published figures looked bullish, the whispers from the trade floor and price action indicate that many believe the USDA would raise yield on this report while final yield still remains in question.

The average trade guess was for a reduction in yield of .3 bu per acre down to 46.6 for beans and an ending carryout number of around 430m bu. Much like corn, price action indicates some uncertainty to what the USDA would do as a 430 carry out heading into South American growing season should mean higher prices.

The report posted a 167 yield on corn, which was slightly below average trade guess and based on pre-report market action. Some near-term, short-covering will be expected while the market seeks fair value.

The USDA offset most of the decrease in production with demand cuts, so the carryout was left largely unchanged. Overall market is trading 5-8 higher believing that the highs on yield are in and can work lower from here.

The bean yield was posted at 46.9 which was unchanged compared to last month and mildly disappointing. The USDA also lowered demand for beans by taking crush down 15m. The bean market is currently trading mixed to lower, mostly based on conflicting reports on tariffs.

In general this report can be seen as neutral leaving the market to ponder seasonal demand, trade, and South American production. Now that the report is behind us, it is reasonable to expect a steady to slow grind higher from these levels as risk premium from South American growing season and unforeseen demand from China could further tighten stocks. The additional uncertainty around later harvested acres will also be mildly supportive. While we do not believe there will be an explosive rally without a meaningful weather event, we do feel that prices can work higher. The biggest thing to watch is for spreads to tighten and basis firm as producers have been on the sidelines awaiting higher prices and keeping grain off the market. Unless we see a more significant rally, this trend should continue and could provide opportunities for historical or better basis levels in most locations," Lumsden says.

----Jason Roose, U.S. Commodities, says that with harvest coming to a conclusion on soybeans, and corn harvest moving at a historic slow pace, today's November WASDE report had to answer many questions to this years crop.

“As harvest progresses, the USDA confirmed the corn crop is getting smaller, but not as disappointing as earlier anticipated. Corn production was reduced 118 million from last month on a 1.4 bushel reduction. World ending stocks were left primarily unchanged from last month for both corn and soybeans which was a surprise to the trade. This is short term optimistic,” Roose says.

Mike

-----------------

At 11:30am:

At midsession, the Dec. corn futures are 4¢ lower at $3.79 1/2. March corn futures are 4 1/2¢ lower at $3.88 1/4.

Jan. soybean futures are 5¢ lower at $9.31. March soybean futures are 4 3/4¢ lower at $9.44.

Dec. wheat futures are 1¢ higher at $5.13.



December soymeal futures are $1.60 per short ton lower at $304.00.

 December soy oil futures are 0.25 cents higher at 31.68¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.15 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 43 points lower.

Mike

-------------

At 11am:

 

USDA Report Delayed!

 

Mike

At 8:45am:

In early trading, the Dec. corn futures are 3/4¢ lower at $3.74 1/2. March corn futures are 3/4¢ lower at $3.83.

Jan. soybean futures are 1 3/4¢ lower at $9.34 1/4. March soybean futures are 2¢ lower at $9.46 3/4.

Dec. wheat futures are 2 1/4¢ lower at $5.10 1/2.



December soymeal futures are $0.80 per short ton lower at $304.80.

 December soy oil futures are 0.09 cents higher at 31.52¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.91 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 13 points lower.

On Friday, private exporters reported to the USDA the following activity:

--Export sales of 270,000 metric tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year; and

--Export sales of 217,040 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for corn and soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors will be watching today’s USDA Reports closely.

“The USDA supply/demand report today is likely to be bearish for corn, as the USDA factors in smaller exports, and with reduced corn being used for ethanol. Even if the USDA makes a small reduction in the corn yield, ending stocks may be larger than last month. The trade expects stocks to be 112 million bushels less than October,” Kluis told customers in a daily note.

Kluis added, “Watch how the trade reacts to the USDA reports today. The key is the market action from noon until the close at 1:15 PM.”

 

Mike

 

 

0 Kudos
19 Replies
Honored Advisor

Re: Floor Talk, November 8, 2019 (Report Day)

"Al Kluis, Kluis Advisors, says that investors will be watching today’s USDA Reports closely."

 

Right here boys and girls is the problem.

No different than in biblical times with money changers in the churches.

Peoples livelihood and futures controled by people with no scruples. No real skin in the game.

No conection to production or use of the product.

Frequent Contributor

Re: Floor Talk, November 8, 2019 (Report Day)

I wonder what kind of lies the usda will have for us today.

Frequent Contributor

Re: Floor Talk, November 8, 2019 (Report Day)

Well said!

Veteran Advisor

Re: Floor Talk, November 8, 2019 (Report Day)

Hobbyfarmer,

 

So, you don't subscribe to the idea that investors that don't own a tractor or a pair of boots provide liquidity to the markets?

 

Mike

0 Kudos
Veteran Advisor

Re: Floor Talk, November 8, 2019 (Report Day)

samalan1140,

 

I'm not sticking up for it, but the USDA puts out the biggest effort than anyone, in an attempt to get its arms around what's grown, stored, sold, and on-hand more than anyone in the world. Do you have a better option? I would love to know about that group, if its out there.

 

Mike

0 Kudos
Honored Advisor

Re: Floor Talk, November 8, 2019 (Report Day)

and absolutely 0 culpability.............  Kruse, Mike, SF, Usda employees, nass, congress,  Only the administration has responsibility to the voters. (culpability) and who gets the blame?---- the rest of these leaches base a career on delivering the political message from the department that calls itself the "envy of the world" for faking every bit of theory presented as fact---- It must get hard to live up to being better than the countries that wouldn't waist money on frivolous, unproductive departmentalizations of bureaucracy.  

In fact the futures market is being undermined by this process..... and in fact the futures market is the process that regulates the flow and accessability of commodities.  Not usda.  Believe me these career political advocates will and are attempting price controls through edict.  They have overstepped their purpose of oversight to become part of the process of price creation..... in the same way media has grown from reporting to news creating, usda now believes it controls agriculture by creating the "probable truth".

We are faced with a history question.  Who invaded US agriculture first, the corporate monopolies or the government? Or was this takeover a joint venture which won't be limited to one entity status?   

For it seems to me that congress, through it's failure to enforce monopoly laws and its zeal for regulating out small business, was necessary for the the bureaucratic takeover of agriculture --- as well as the rest of the economy.  

It is why the electoral congress will be under attack constantly....... 18% of the population lives on and controls 97% of the land in the US (and nearly all of agriculture land)  Less than 0.14% of the population actually produces the majority of commodities.  82% of the population lives on 3% of the land mass in the US and can not feed itself or pay for its own social programs.  Cities in financial trouble make up the majority of our population.

Many things have contributed to this dilemma but I want to remind you that China still has over 51% of its population in rural settings...... not sure what that says but in the US...... we are riding the agriculture horse into the ground.

 

Honored Advisor

Re: Floor Talk, November 8, 2019 (Report Day)

Finally consider this     the @1% of the population that produces food and fiber for the rest of the population is doing it through technology and foreign labor..... because those cities are not going to provide any labor contribution to its own food supply.  That 82% of the population is not encouraging a career in agriculture.  Even those in agriculture would rather leave than be an employee.  But if forced economically, might consider it as long as the right to complain remains.

When do you know it is a sinking ship?

Frequent Contributor

Re: Floor Talk, November 8, 2019 (Report Day)

Bahaha that' a joke right? I have seen usda speakers at farm show's and you tell it's so scripted and they are a bunch of damn liers,kinda like alot of traders and people that write reports every day.

Highlighted
Senior Contributor

Re: Floor Talk, November 8, 2019 (Report Day)

Traded lower for weeks anticipating this report near six week lows today, all for this BS?  Another report another dollar in the pockets of the thieves that have completely ignored this entire season.  Now, far enough along to ride the train into 2020 bumper record crop without ever losing a step in this ridiculous suppressed market.  What a joke ! Mike nobody blames you just doing  your job, however there’s no way you yourself can believe and support this upside down system.  With the late planting and PP acres alone markets should have spiked to 2012 levels.   How do these guys sleep at night unbelievable.?.