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Veteran Contributor

Floor Talk September 12 (Report Day)

At 11am:

 

USDA SAYS:

 

U.S. Corn Yield=  174.4 bu./acre

 

U.S. Soybean Yield=  50.6 bu./acre

 

U.S. old-crop soybean carryout=  195 million bushels

 

U.S. old-crop corn carryout=  1.71  billion bushels

 

2016/17 Ending Stocks

 

Corn=  2.38 billion bushels

 

Soybeans= 365 million bushels

 

 

If realized, the U.S. 2016 corn production would be a record-large 15.093 billion bushels. For soybeans, the 2016 cropsize would total 4.201 billion bushels, figuring today’s USDA yield estimate of 50.6 bu./acre.

 

What say you?

 

TRADE RESPONSE

 

--Jack Scoville, The PRICE Futures Group, Senior Market Analyst, says that the USDA left estimates high and above expectations.  
“The beans were especially big with the above 50 bpa, wow,” Scoville says.  
The corn must be looking at increased area. Not sure the market completely believes the corn estimate as it is holding pretty well.”
The headline yield estimate for beans, above 50, is creating the selling there as much as anything, Scoville says.  
“These are big numbers, bigger than expected by the trade, and the market is doing what it should do.  We will trade these numbers for a while and then start looking for harvest results.  But, the backdrop provided today is bearish and will help keep rallies in check for a while.

 

--Sal Gilbertie, Teucrium Trading, says that with the lone exception of the slightly higher than expected increase in its estimate for soybean production, the USDA seems to be walking a tightrope between their aggressively optimistic numbers last month and the slightly reduced trade expectations that were anticipated for this month.
“The bottom line is that there were no real surprises from this report, and the focus from this point forward will be the progress of the current harvest to see if it lives up to expectations,” Gilbertie says.
He adds, “Both global demand and supply for all grains continues to be robust and at record, or near record all-time highs, and current multi-year low prices as we head into the Northern Hemisphere’s prime harvest time will likely keep demand up, consumers happy, and traders with short positions nervous and edgy.”
It will be interesting to see what farmers do with their crops, if prices remain at current levels through the completion of harvest, Gilbertie says.

 

---Jason Roose, U.S. Commodities in West Des Moines, Iowa, says the report is unfriendly to farm markets.
“As harvest approaches, the USDA increased the soybean ending stocks by 35 million to 365 million. Also, it increased the yield from last month to 50.6 bushels per acre. The corn carry out and yield were lowered slightly from last month’s crop report. The 174.4 bushel per acre on corn would be a record setting yield.”

 

--The report is what was expected, when considering what folks are saying about their crops. Folks say they have a strong soybean crop, weaker-than-expected corn crop.

 

 

Mike

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

At the close:

At the close, the December corn futures finished 1 1/2¢ lower at $3.39 1/2, and March futures finished 1 1/2¢ lower at $3.50 per bushel.

November soybean futures close 16¢ lower at $9.64½; Jan. soybean futures ended 15 1/2¢ lower at $9.68 3/4.

December wheat futures closed 5 3/4¢ higher at $4.09 1/4.

December soy meal futures closed $4.60 short ton lower at $311.90. December soy oil futures settled 0.73¢ lower at 32.64¢ per pound. 

In the outside markets, the Brent crude oil market is $0.35 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 238 points higher.

 

Mike

----------

At mid-day:

At mid-day, the Dec. corn futures are 3 3/4¢ lower at $3.37, while March futures are 3 1/2¢ lower at $3.48 per bushel. Nov. soybean futures are 19 3/4¢ lower at $9.60 1/2, while Jan. soybean futures are 19 1/2¢ lower at $9.64. Dec. wheat futures are 2 1/4¢ higher at $4.05. Dec. soymeal futures are 8.50 short ton lower at $308.00. Dec. soyoil futures are $0.65 lower at 32.72¢ per pound.  In the outside markets, the Brent crude oil market is $0.35 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 128 points higher.

 

Mike

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

In early trading:

At 9:00am, the Dec. corn futures are unchanged at $3.41, while March futures are unchanged at $3.51 per bushel. Nov. soybean futures are 2¢ lower at $9.78, while Jan. soybean futures are 1 3/4¢ lower at $9.82. Dec. wheat futures are 4¢ higher at $4.07. Dec. soymeal futures are $0.80 short ton higher at $317.30. Dec. soyoil futures are $0.56 lower at 32.81¢ per pound.  In the outside markets, the Brent crude oil market is $0.57 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 28 points lower.

 

Mike

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

Beans were lower and corn was little changed overnight ahead of today's WASDE report. The USDA is expected to raise its soybean production forecast while lowering its outlook for the corn harvest, according to analysts. Estimates are expected to be more in line with what the Pro Farmer tour saw than what the government projected in August. There's nothing new in the weather department: rain, rain and more rain in much of the Midwest, and dry weather forecast for Ohio. 

 

Here's what happened overnight:

 

Brent Crude Oil = 2.3% lower.
West Texas Intermediate Crude Oil = 2.4% lower.

Dollar = up 0.1%.

Wall Street = U.S. stock futures lower in overnight trading. 
World Markets = Global stocks decline amid fears central banks will slow easing. 

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7 Replies
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Veteran Advisor

Re: Floor Talk September 12 (Report Day)

Are the traders at all concerned with the crop quality issues?  Rain isn't making grain anymore, just disease in some areas.

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Honored Advisor

Re: Floor Talk September 12 (Report Day)

The traders don't care about quality........just quantitiy.   They'll leave the worrying to all the local buyers to deal with.  The first elevator that puts out their new discount schedule won't stand a chance. The discount rates will probably get higher as the fall goes on when they realize just how much is damaged.   Of course while it's the elevators that will have to deal with it,   it's the farmers who WILL pay for it..........always works that way don't it?  Smiley Wink

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Veteran Advisor

Re: Floor Talk September 12 (Report Day)

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Senior Advisor

Re: Floor Talk September 12 (Report Day)

Traders should love this arbitrage opportunity and farmers could love it, too. The market will trade the numbers and if farmers are confident the numbers are wrong they can use that information to make money.  Store corn and avoid futures sales if the price will rise.  Even buy calls or futures for the gutsy.

I'm staying short everythingn left for a couple of weeks.  All I have left is one short CZ for gambling and all my SX is still short the board.  But, I'm watching pretty closely.  Smiley Happy

 

 

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Advisor

Re: Floor Talk September 12 (Report Day)

Even if these numbers are close to correct still 50 bushel short of covering at these current prices. On the soybeans 10bushel higher to cover. Sad sad sad; conditions sure aren't looking good either lots of mold and fungus EDS in the beans. As I just stated though a healthy crop at these numbers is still a loss for farmers.🤔
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Veteran Advisor

Re: Floor Talk September 12 (Report Day)

--Nick Mueller, Senior Market Advisor | Stewart-Peterson, says that overall the report was bearish to neutral.  "Pretty much came in as expected.  Corn yield was lowered slightly to 174.4.  This number may have further room to be adjusted lower over the upcoming months due to the warm July nights.  Bean yields were raised to 50.6.  This is a number that may have room to be adjusted higher in the upcoming months.
 
Given current prices, fundamentals and how the funds are positioned.(they hold a large short position in corn and a lofty long position in beans)  I like adding length in Corn using Dec of 17 options on price dips.  And I like adding downside protection for beans using march options on rallies."

 

--Mike North, President Commodity Risk Management Group, says that USDA put to rest the ongoing discussion regarding yield and what it can be...for at least the next couple of weeks.  "As harvest data continues to roll in, further confirmation or rebuttal will build as we move into October.  For today, however, results appear very similar to last month.  Corn yield was dropped to 174.4 bpa while soybeans rose to 50.6, another new record.  With that in mind, ending stocks remained changed very little as demand values were adjusted in tandem.  Notably, corn feed usage dropped 25 million bushels while soybean crushings rose 10 million bushels and exports climbed another 35 million.  2016/17 Corn ending stocks now stand at 2.384 billion bushels, a decline of 25 million, while soybean ending stocks climbed 35 million to 365 million bushels."



 
 

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Honored Advisor

Re: Floor Talk September 12 (Report Day)

Milk the other day was 88¢ 1/2 gallon.

 

About 15 of my neighbor s raise free range eggs, 12 or so of them are organic. Twenty thousand per building.

Last week one of them had a pallet of pullet eggs, was paid 20¢ a dozen and told to get rid of them, broker couldn't even get a bid from the local breaker. 

 

Who's hoi going to surrender first the egg guy's

The milk guy's

The cattle feeder

The guys raising sub $3 corn

 

?????

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