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marketeye
Veteran Advisor

Floor Talk September 25

At the close:

The December corn futures settled 3 1/2 cents lower at $3.26 per bushel.

November soybean futures finished 14 cents lower at $9.22.

December wheat futures closed 6 1/4 cents lower at $4.74.

In the outside markets, the crude oil is $0.02 per barrel lower, the dollar is higher, and the Dow Jones Industrials are 236 points lower.

 

Jack Scoville, PRICE Futures Group vice-president, says that the market was kind of caught in a buy the rumor and sell the fact situation, with the expected strong beans sales.
“The beans and corn are focused on the big yields that continue to be reported.  They are awesome and more downside is likely, especially in the beans,” Scoville says. 
Better price action was expected in the wheat market, with the Nigeria sale today. “But, the export sales report was bad and the dollar is higher. That is enough to keep wheat weak, although I suspect the bottom is near as the spring harvest should start to wind down now.”
Beans still have some pretty significant downside potential, as there are still profits there for farmers, he says. 
“So, I expect farmers to sell beans off the combine and store corn that was not already sold.  Corn might have 10-15 cents of downside left, but beans are still high priced when compared to corn or wheat,” Scoville says.
As a result, the soybean market is seen having the potential for less demand than last year and certainly not the tight stocks-to-use scenario that we had last year, he says. “And, the market is looking at planting of potentially a huge crop getting under way in South America.  Beans could get ugly while the other two turn more to flatline.”

 

Mike

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At mid-session:

The December corn futures are trading 3 1/4 cents lower at $3.26 per bushel.

November soybean futures are trading 11 1/4 cents lower at $9.25.

December wheat futures are 8 cents lower at $4.72.

In the outside markets, the crude oil is $0.20 per barrel higher, the dollar is higher, and the Dow Jones Industrials are 245 points lower.

 

Mike

--------

At the open:

The December corn futures are trading 1/4 of a cent higher at $3.29 per bushel.

November soybean futures are trading 1/4 of a cent lower at $9.36.

December wheat futures are 4 cents lower at $4.75.

In the outside markets, the crude oil is $0.28 per barrel higher, the dollar is higher, and the Dow Jones Industrials are 47 points lower.

 

Mike

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At 7:35am:

Separately, the USDA Weekly Export Sales released Thursday indicate corn beat expectations, soybeans at the high end.

 

Wheat= 396,300 metric tons  vs. the trade's expectations of 350,000-600,000 metric tons.

 

Corn=1.106 million mt vs. the trade's expectations of 400,000-1.0 million metric tons.

 

Soybeans= 2.980 million mt, vs. the trade's expectations of 1.2 million-4.0 million metric tons.

 

Mike

------------------
At 7:00am:

Early calls: Corn is 1-2 cents higher, soybeans 3-5 cents higher, and wheat 1-2 cents lower.

Trackers:
Overnight grain, soybean markets = Trading mostly higher.
Brent Crude Oil = $0.18 per barrel higher.
Dollar = Higher
Wall Street = Seen higher, as Nike reports earning today, and more FOMC speeches are expected.
World Markets = Europe stocks were mostly higher, Asia/Pacific stocks were higher.

 

More in a minute,

 

Mike

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12 Replies
luisvieira
Senior Contributor

Re: Floor Talk September 25

Mike,

 

There was a judicial victory for Monsanto in Brazil. I'm talking about the case where the American multinational wants to charge royalties for the seeds even when it is a replacement for the new crop with 2% of the production value. Farmers were the challengers in this case represented by the Federation of Agriculture Workers of Rio Grande do Sul and went to court in 2009. In 2012, the first decision favored farmers. Now the result was two votes against one in favor of Monsanto. A new appeal still can be made. Judges argued that all players involved agreed in the contract and the agreement was legal based on the Brazilian patent law. 

 

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Blacksandfarmer
Veteran Advisor

Re: Floor Talk September 25

Mike, those are some nice export sales! We will need them to chew through this crop. Harvest is just beginning in my area. Harvest should be in full swing here next week. On a side note, I've heard of a couple large grain elevators in the area offering $3 to $5 over for beans as of a week ago. We were completely out of soybeans here.

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giolucas
Veteran Advisor

Re: Floor Talk September 25

Nice export numbers and the market is still going down.   I know, I know, the weather , right?

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marketeye
Veteran Advisor

Re: Floor Talk September 25

giolucas,

 

Actually, it seems the big yield reports are weighing on the market, more than anything else.

 

Mike

 

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giolucas
Veteran Advisor

Re: Floor Talk September 25

I knew I missed something.

 

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sneeky253
Frequent Contributor

Re: Floor Talk September 25

Scoville wrote:

"Beans still have some pretty significant downside potential, as there are still profits there for farmers, he says."

 

Does this mean he thinks that the price will fall to cost of production? What is the cost of productions for beans? $9 beans @ 50bu is obviously $450 and acre, is there a profit in that?

 

I am also struggling with the export numbers. In particular the "trade's expectations". Soybeans= 2.980 million mt, vs. the trade's expectations of 1.2 million-4.0 million metric tons. Thats one heck of a range isn't it? I am guessing the range is just what different traders are expecting, which can be pretty pointless.

 

Thanks for the market reports Mike, I read them every day. 

bkadds
Advisor

Re: Floor Talk September 25

Mike--they have been talking big yields since shortly after planting! Should be near 250 on corn nationwide by now. By the end of harvest might be pushing 275 with corn under $1.
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Hobbyfarmer
Honored Advisor

Re: Floor Talk September 25

"As a result, the soybean market is seen having the potential for less demand than last year "

 

Total B.S. from my perch here in the cheap seats.  Might get to be more production and a corresponding lower price BUT not less usage. Becoming less impressed with this dud(e). BTW pipeline  was/is empty, sales are great, first 10% just gone.

 

$1.50 bu cheaper freight out of Iowa to China than out of Mato Grasso. Corn with a $2 and beans with a $8 or less here are an unmitigated disaster down yonder.

 

Had an interesting conversation with an insurance agent and former bank loan officer, said a number of the high fliers are planning on non pmt of their second half cash rent.  What makes them think they can just renig on their obligations?  Try that on JD finance, the bank, the crop insurance premium, how about property taxes?  OK if you do it to an elderly couple or widow lady?  Time to thin the herd. Bad case of No Honor.

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Hobbyfarmer
Honored Advisor

Re: Floor Talk September 25

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