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Veteran Advisor

Floor Talk September 2, 2020

At the close:

 

At the close, the Dec. corn futures finished 3/4¢ higher at $3.58. March corn futures closed 1 1/2¢ higher at $3.69 1/4.

Nov. soybean futures settled 7 1/4¢ higher at $9.62. January soybean futures ended 7 1/4¢ higher at $9.68 1/2.

Dec. wheat futures ended 5 3/4¢ lower at $5.58 1/4.

Dec. soymeal futures closed $0.60 per short ton lower at $310.20.

Dec. soy oil futures finished $0.65 cent higher at 33.53¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.33 per barrel lower at $41.43. The U.S. dollar is higher, and the Dow Jones Industrials are 286 points higher.

Jason Roose, U.S. Commodities, says that active buying continues in the grains today.

“This follows a mixed overnight trade, as spot exports continue for corn and beans with a weaker dollar making U.S. grains attractive. Unknown yield reports will counter any early harvest pressure. The weather will still be watched close for the next market move,” Roose says.

 

Mike

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At midsession:

 

At midsession, the Dec. corn futures are unchanged at $3.58. March corn futures are 1/4¢ higher at $3.68.

Nov. soybean futures are 3 3/4¢ higher at $9.58 1/2. January soybean futures are 3 1/4¢ lower at $9.64 1/2.

Dec. wheat futures are 7 1/2¢ lower at $5.56 1/4.


Dec. soymeal futures are $0.30 per short ton lower at $310.50.

Dec. soy oil futures are $0.48 cent higher at 33.36¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.95 per barrel lower at $41.81. The U.S. dollar is higher, and the Dow Jones Industrials are 181 points higher.

 

Al Kluis, Kluis Advisors, says that the market bulls have their work cutout for them, if they are going to keep control of the markets.

"Momentum indicators across the grain complex are deeply overbought. Will the funds continue to be buyers of grains with harvest just around the corner? Take advantage of the unseasonal rally and protect prices when you can, not when you have to," Kluis told customers in a daily note.

He added, "The rally in grains is taking for granted some declines to production. The question now: How much decline? It may be difficult for the bulls to keep the momentum going until the next USDA report (Friday, September 11)."

Mike

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Honored Advisor

Saw corn harvest yesterday

In the Perry and Rippey area yesterday saw three outfits running in corn fields.

Thousands of acres already done.

This was in the badly damaged wind area.

One high speed verticle tillage machine and two guys discing.

Stopped and inspected a bean field just outside Jefferson, Ia.

Very short, half or more of  pods already brown, high % of two bean pods.

The beans will be very small seed size. Very likely to be a ways under crop insurance guarantees.

Two more weeks and harvest reports should start coming out of the drought area in west central Iowa.

Gonna be a lot of + or - 40 bu beans out of that 60+ bu area.

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Honored Advisor

Re: Saw corn harvest yesterday

“Momentum indicators are deeply overbought”...........unless they’re not.

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Honored Advisor

Re: Saw corn harvest yesterday

And since we are piling on, Alan certainly knows that there is a very strong seasonal HIGHER form early august in to the Labor Day window. This this is NOT a counter-seasonal move, it is a very normal seasonal move.  :-0

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Re: Saw corn harvest yesterday

I took the small tour with hobby —some things were impressive   1-The width of the damage   2- the completeness of the damage (tall tree protection on three sides and a 20 acre field is flat in the middle — valleys just as flat as ridges— brown and dying). It is almost as unspeakable as the farm media coverage.  3 -the finality of the damage, someone needs to wake our senior citizen Al K. And that knothead at fcstone who assessed the damage before the stalks hit the ground, then was quoted by lazy media country wide. Come and see — it is still an awesome freighting site.  

When the insurance companies(who normally will force harvesting over 2 bushel are saying “harvest is impossible it’s totaled”—— it’s sad.  But where would it be stored — bins rolled up like tin foil — we took 2 roads north then back south  and saw bins destroyed in every area.

not one marketing adviser seen on that trip.  Not one.  “Already in the market” wrong—  most of what we saw is not gonna be in the market  

Lets call it a wake. The neighboring state farmers are doing drive by’s, hat in hand, viewing the corpse.  The local family has nothing to say. Media included.

we saw as many bushels lost in our day as fcstone predicted loss for the whole state and we never east enough to see Des Moines.

Drought is being blamed but that just facilitated the stalk snap. South of the wind there is drought corn that will make 130-160. The wind area has lost 130-160 bushels and it’s drying to unharvestable brown mush.  I doubt the press is going to send in those “protestors” to hand pick ears.  Not a good photo op.

At least the many tractors we saw discing it are gonna know where all the steel debri is located — the seed signs have vanished—and no black hooded sweatshirts will be buried in Iowa corn fields—not a plus for fertility. 

As Iowa goes so goes corn. — 

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Honored Advisor

Re: Saw corn harvest yesterday

You other  states just can't compete with Iowa.

#1 chickens

#1 hogs

#1 corn

#1 beans (most years)

# 1 wind damaged crops ($ amount)

The area we toured was the western edge of the damage.

I/we didn't schedule enough time to tour the area from Marshalltown east

Where the wind exceeded 100 mph and as high as 140mph and lasted as long as 25 minutes.

Cities like Cedar Rapids had power out in parts of town for over a week.

The infrastructure damage was a power of 10 (at least) worse east of where we went that day. 

Being #1 sometimes is NOT a good thing.

We were on the east edge of the worst drought area and the beans failed to close the rows on 30" 

The destroyed fields showed some yellow ears laying around. The one field driveway we pulled into that was showing quite a bit of yellow, the ears were less that perfectly pollinated and small around.

20 to 40 miles wide and a couple hundred miles long with that level of damage is significant and will move the production output number lower.

The hocus pocus yield number thing they will come up with Will no doubt exclude these failed acres.

 

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Re: Saw corn harvest yesterday

I’m amazed there isn’t more outrage from that area.  Usda and the market fungus ignores Iowa as much as they ignore the fringe.  Stone comment is “we had it figured in”.... what they reported as loss wasn’t more than a single digit % of that areas production.  But when it’s disced in that’s 100% loss.  

Thought we might see Des Moinians out there gathering ears to fight for that #1 status.  That’s a terrible loss for a state that consumes all it raises.

i wonder how many bins won’t be rebuilt?

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Re: Saw corn harvest yesterday

Also I agree , we did not see great corn. That might be accelerating the plowing.  If the proven yields were higher than the real potential..     the best corn in Iowa might be the insurance guarantee on the cash flow..   there’s better crops south and east toward the flint hills then drought takes over again corn again.

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and I was disappointed in beans yet their hard to predict from observation and will respond better to stress.  ThAt looked like a lot more stress than benefit.  I Don’t think they were without damage.

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Re: Saw corn harvest yesterday

As th guy who has been talking about $12 beans in March 2021 since April, it sures feels more and more likely. But of course, they might not get there due to other economic issues. Maybe think of it as "they are very unlikely to crash until after March of 2021 and just wait and see what happens". Short-term top is due this week or next, how far they fall going through harvest will be quite telling as to where they end up this winter.

All of that said, traveling to the worst crop area in north america is certainly a good way to totally screw up your mind in terms of managing risk. Might I suggest, for balance, you drive across  I 70 to the east.

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Re: Saw corn harvest yesterday

Time, do you really think a simular sized area along I70 with maybe a 15  to 25 bu better crop than normal will compensate for literally millions of acres of central Iowa being a. ZERO?

Then there is a few million acres dinged that will be at average to below average, then there is millions of droughty acres below average by maybe 20 to 50 bu per acre. These are not fringe acres. 

Maybe you are the one that needs a drive about? I suggest hwy 30 through Iowa.

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