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Veteran Advisor

Floor Talk, September 25, 2019

At the close:

 

At the close, the Dec. corn futures finished 1/2¢ lower at $3.74 1/4. March corn futures ended unchanged at $3.85 1/2.

Nov. soybean futures settled 5¢ lower at $8.89 1/4. Jan. soybean futures closed 4 1/4¢ lower at $9.03 1/4.

Dec. wheat futures closed 4 1/2¢ lower at $4.77 1/4.



December soymeal futures settled $1.90 per short ton lower at $297.60.

 December soy oil futures closed $0.13 lower at 29.20¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.18 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 162 points higher.

 

Dustin Johnson, AgYield senior strategist, says that today’s listless trade is hard to read.

“Not really sure about today's action, other than perhaps weakness from a sharply higher U.S. Dollar Index. Today’s soybean sale to China was favorable this morning, but also was expected. Ethanol’s weekly production is down but bigger drawdown in stocks than expected. Overall, the markets are fairly quiet from our point of view,” Johnson says.

 

Mike

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At midsession:

 

At midsession, the Dec. corn futures are unchanged at $3.74. March corn futures are 1/2¢ higher at $3.86.

Nov. soybean futures are 6¢ lower at $8.88 1/4. Jan. soybean futures are 5 1/4¢ lower at $9.02 1/4.

Dec. wheat futures are 1 1/2¢ lower at $4.80 1/4.



December soymeal futures are $1.60 per short ton lower at $297.90.

 December soy oil futures are $0.26 lower at 29.07¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.00 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 149 points higher.

Mike

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At 10:11am:

The EIA weekly ethanol production report, Wednesday, shows that U.S. output for the week ending Sep 20th hit a low not seen since April 2016. This past week's production averaged 943,000 barrels per day, equaling 6.6 million barrels for the week.

This total output is 6.0% below the previous week and 9.0% off a year ago.

 

Mike

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At 9:06am:

In early trading, the Dec. corn futures are 3/4¢ lower at $3.74. March corn futures are 1/4¢ lower at $3.85 1/2.

Nov. soybean futures are 6¢ lower at $8.88 1/4. Jan. soybean futures are 5 1/4¢ lower at $9.02 1/4.

Dec. wheat futures are 3¢ lower at $4.78 1/4.



December soymeal futures are $1.20 per short ton lower at $298.30.

 December soy oil futures are $0.17 lower at 29.16¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.28 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 99 points higher.

On Wednesday, Private exporters reported to the USDA export sales of 581,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.

The marketing year for soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors will like the China’s soybean purchase announced this morning.

“Ever since the pop on Monday, reports have been floating that China made another round of soybean purchases from the US. If those rumors are not confirmed soon, then the bears will likely push prices lower in the short term,” Kluis told customers in a daily note.

Basis levels appear to be tighter than normal across most of the Midwest, Kluis says.
“That is quite unusual for this time of year. It would not be surprising to see this continue until traders are convinced the US has produced a large crop,” Kluis stated in a daily note to customers.

Kluis added, “Spring wheat continues to grind higher as poor harvest conditions in North Dakota are causing quality concerns. Further harvest delays in Canada are also adding strength in spring wheat. Recall that the funds held a record short position in spring wheat just a few weeks ago. If the funds are going to cover that position, then it is likely we have further upside potential in spring wheat,” Kluis stated.

 

Mike

 

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7 Replies
Honored Advisor

Re: Floor Talk, September 25, 2019

Basis Levels -"Appear to be tighter than normal"....uh, they don't "appear" to be, they are off the chart, a fact not an appearance.

"continue until "traders" are convinced the US has grown a large crop....

Just to review, Basis is set by the actual users of the grain, NOT "traders"....geezzz that is so simple. It is the "traders" who have driven the futures to low levels based upon the error-filled data from NASS/WASDE. The traders are already convinced we grew a big crop and have already lowered the price to prove it. The Actual Users/Merchants are not convinced which is why basis is so tight. Cash prices for corn are a full 65 cents (about 20%) above last year. Futures prices are about unchanged. It is a major and unwarranted disconnect based upon pretty weak science from NASS. This is pretty simple market mechanics that everyone understands, well accept some Guru's I guess. :-)

WTBDS....getting hats made... (Weld The Bin Doors Shut)  :-)

Honored Advisor

Re: Floor Talk, September 25, 2019

Yea BUT

We need them for market liquidity.

 

Might liquidity some into liquidation.

Like having a tapeworm for weight control...

Veteran Advisor

Basis, September 25, 2019


@timetippingpt wrote:

Basis Levels -"Appear to be tighter than normal"....uh, they don't "appear" to be, they are off the chart, a fact not an appearance.

"continue until "traders" are convinced the US has grown a large crop....

Just to review, Basis is set by the actual users of the grain, NOT "traders"....geezzz that is so simple. It is the "traders" who have driven the futures to low levels based upon the error-filled data from NASS/WASDE. The traders are already convinced we grew a big crop and have already lowered the price to prove it. The Actual Users/Merchants are not convinced which is why basis is so tight. Cash prices for corn are a full 65 cents (about 20%) above last year. Futures prices are about unchanged. It is a major and unwarranted disconnect based upon pretty weak science from NASS. This is pretty simple market mechanics that everyone understands, well accept some Guru's I guess. :-)

WTBDS....getting hats made... (Weld The Bin Doors Shut)  :-)


Basis or whatever happens to be 90 cents over paper corn in some areas now.  

Definitely some $4.50 to $4.75 Cash corn in some areas now. 

Looks like $5 50 could hold Cash corn as harvest rolls. 

Honored Advisor

Re: Basis, September 25, 2019

Being one of the most non committal traders alive........... It seems Kluis is even more noncommittal than I.

If he hedges his words so carefully why would my non committal self want him to help with my marketing?

But lets step back and say I don't want to be too clear on anything.  Just keep notching the desk every time it seems he fails to make a point.............gonna take a carpenter to get me to Christmas.

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Senior Advisor

Re: Basis, September 25, 2019

4.50   -  4.75   ca$h   is  located  at  which  terminal  or feed  lot  -  ? 

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Honored Advisor

Re: Basis, September 25, 2019

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Honored Advisor

Re: Basis, September 25, 2019

just a tiny bit of freight involved there.

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