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Veteran Advisor

Floor Talk October 12 (Report Day)

At the close:

The Dec. corn futures settled 4 1/4 cents lower at $6.40 3/4. The Nov. soybean contract closed 4 cents higher at $12.39 1/2. The Dec. wheat futures ended 34 cents lower at $6.26 3/4. The Dec. soymeal futures finished $2.10 per short ton higher at $322.70. The Dec. soyoil futures closed $0.32 lower at $51.86.

In the outside markets, the NYMEX crude oil is $0.41 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 159 points.




At mid-session:

The Dec. corn futures are trading 13 3/4 cents lower at $6.31 1/4. The Nov. soybean contract is trading 4 1/4 cents lower at $12.31 1/4. The Dec. wheat futures are trading 37 cents lower at $6.23 3/4. The Dec. soymeal futures are trading $0.40 per short ton lower at $320.20. The Dec. soyoil futures are trading $0.32 lower at $51.86.

In the outside markets, the NYMEX crude oil is $0.42 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 121 points.


One floor trader says, "Wheat is sharply lower due to the carry over number which was much higher than expected which is very bearish for wheat. The report was pretty much neutral to slightly bullish for corn and beans but the wheat market is dragging them down."


One analyst says this lower market is a result of 'buying the rumor and selling the fact' trading. He says, "Well, it's always buy the rumor sell the fact. So, 9 out of 10 bullish reports are sold on a higher opening, as they have priced in the report prior, like they did with the Monday and Tuesday big rallies ahead of today. But, its not how you open but how you close that tells you the near term trend," he says.




At the open:

The Dec. corn futures opened 5 cents lower at $6.38. The Nov. soybean contract opened 2 cents lower at $12.33 1/2. The Dec. wheat futures opened 21 1/4 cents lower at $6.39 3/4. The Dec. soymeal futures opened $1.20 per short ton higher at $321.70. The Dec. soyoil futures opened $0.18 higher at $52.38.

In the outside markets, the NYMEX crude oil is $0.41 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 106 points.




At 7:31am:


Corn=12.433 billion bushels

Soybeans=3.060 billion






Early Calls:

Corn=3-5 cents higher

Soybeans= 5-10 cents higher

Wheat= To follow corn







--One Trader says, "The reports were supportive... with relatively low yields....rumors Chinese have bought more corn...though can't pin down origin...may be Argentine...? The report and news of business in corn beans and soy oil, all put into perspective the break last month which was inspired by break in European equities...index rebalancing and energy price break. But, with markets now liquidated to short...(record short in wheat and meal and oil both short...the report today clarifies lows...and carryout is tight enough in beans and corn that we need to be self consicous of South American weather and production potential...OTC has traded +20 to +3 already this morning...beans should be unchanged to + 20..would be my call."

--One analyst says, "Yawner, no surprises.World carryover was bearish across the board, corn carry slightly bearish on the day as it was over the pre-report average guess, but still under 1 b.b. and bullish in the big picture long term. Bean carry well under the average and bullish into 2012. Yesterday's rally cushions today's friendly report but get excited about next year stocks are coming in low."


--One analyst says, "Wheat – ending stocks much larger than expected – this is a surprise.  Corn – slightly  negative on stocks from expectations, yield unchanged – that could be a small surprise. Soybeans – carry out down 23 mb from expectations – price drop is creating demand.  My thoughts – a 25% drop in corn price should increase demand. China buying.


--One analyst says, "The report is bullish beans, and a little negative to corn and wheat.  Production and ending stocks estimates below expectations in beans, so they could rally pretty strongly early in the day.  But higher than expected ending stocks in corn and wheat will hurt prices there today.  Rice numbers on the bullish side.  My calls are higher, maybe 20 or 25 higher at a guess, corn perhaps a little higher, maybe 5, and wheat more steady to lower." 


--Another analyst says that overall, a pretty good report by USDA, gaining a little faith back from the trade.

"Corn comes in over trade estimates by 60 million bushels so by itself that is negative. I don’t really understand how they lower exports, but they did by 50 million bushels.
Corn yield stays the same and harvested acreage declines 500,000 acres.
Bearish corn, gotta be 20 lower after yesterday’s big up day. Biggest change in corn was the addition of the stocks “found” in the Sept 30th Grain Stocks. This needed to be accounted for and it was.
Beans were positive, yield declined 3/10 of a bushel and harvested acres declined 100,000 acres.
They cut bean exports by 40 million bushels which is agreeable.
Beans by themselves would be 10-15 higher easy but wheat and corn were both negative so they will likely weigh on it.
 2 things I disagree with
1.       Lowering exports in corn by 50 million bushels. The weekly tally needed to be 20 million bushels/week, a number we view as very attainable. That will decline now with this 50 million bushel cut.

2.       Not raising feed usage for corn. I think this number is ultimately UNDERSTATED and will be adjusted in future reports

Agree with
1.       Corn acres reduction of 500,000

2.       Bean yield declining and I think it will come down further in November report.




At 7:15am:

It's a BIG information day. Yes, the big report at 7:30am. Also, the USDA is expected to confirm corn sales to China around 8am and the market is taking note of the funds buying 35,000 to 40,000 contracts of corn and 30,000 contracts of soybeans yesterday.




At 6:50am:

Early calls: Subject to this morning's USDA Crop Production and Supply/Demand Reports at 7:30am CST.


Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.45 higher.
Wall Street=Seen trading higher after it appears the European countries will secure a bailout for the eurozone.

World Markets=Higher.


Announcement: This morning, following the USDA Crop Production and Supply/Demand Reports, will carry a livestream of the CME Group Press briefing, beginning at 8:15am sharp. Watch the analysts reaction to the report 'live' in a thread that will be started in Marketing Talk. Join us and we hope you find the information beneficial.



More in a minute,




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23 Replies
Senior Contributor

Re: Floor Talk October 12 (Report Day)

Well this is interesting....


usually the price gets bid up to the limit prior to the report being issued- today it is being bid DOWN the limit, which because yesterday was limit up, is 585


never seen that before


not that thats where it will open just a curiosity

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Re: Floor Talk October 12 (Report Day)

I had 148.5 as a working yield since July. We just had our 50percent retrace rally. Guess mt wont need to bloviate anymore. Now we need to find out if the thinks bought grain.
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Veteran Contributor

Re: Floor Talk October 12 (Report Day)

That limit down bid hit the screen right at 7:15 after the overnight closed, so means absolutely nothing. The report was long term bullish with ending stocks back under 1 billion because yields will eventually drop from the 148 bu/ac down closer to 145. The domestic use and export business will be robust and the sales the last 2 weeks on this break proves that $6.00 corn is too cheap in today's world. I think corn will open down some today but will either close higher or be higher by the end of the week.




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Senior Advisor


Seriously man...........give it are starting to sound like brianfo.........spewing out of both sides of your mouth..........go back and look at your comments over have tried to rattle my chain, yet you look like the one that doesn't have a grip on fundamentals........


You were telling me that Brazil's mandate change was going to lower corn usage, mainly because you didn't understand a mandate..........then two weeks ago after the September report you tell people maybe the corn crop is bigger than expected......


Now all of a sudden you have all the answers............


I call BS on your working yield since me this so called post of 148.5..........


I have been in the sub 12.5 camp for a while now and even said closer to 12.3..............we are creeping for soya, we will get to 3.0 or under, also something I have pointed out for awhile now.......

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Re: Floor Talk October 12 (Report Day)

Dude you are the one that doesn't understand mandates. I don't expect you to admit your wrong. Seriously, the only time I increase my yield model was before the frost but quickly lowers it back to 148.5.
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Senior Advisor

Re: Floor Talk October 12 (Report Day)

You guys don't need to go at it. Just throw your ideas out and leave out the personal angle. Thanks.

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Re: Floor Talk October 12 (Report Day)

BTW po-ed would verify the 148.5. Sorry pal I get tired of some always saying the market is always going higher and it'd never going down. That is pure speculation and not marketing. Even lowering a mandate has a bullish spin.
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Senior Advisor

Ideas are one thing..........

facts are another..........a mandate is an instrument of............equal to or greater than...........not equal to..........not equal to or less than.........


while there is a chance it remains equal to..........there is also a chance it is greater our current environment, I would be willing to bet it is some level of greater than, considering what we have seen in our own mandate versus actual numbers........

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Veteran Advisor

Re: Ideas are one thing..........

I've been told that any elimination of a mandate would not kill corn prices or the ethanol industry. What do you folks think? If the 'training wheels' are taken off, can the increased demand for ethanol, both domestically and globally, be the major supporter for this industry?



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