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Veteran Advisor

Floor Talk, September 30, 2019 (Report Day)

At the close:

 

At the close, the Dec. corn futures finished 16 1/2¢ higher at $3.88. March corn futures ended 15 3/4¢ higher at $3.99 1/2.

Nov. soybean futures settled 23¢ higher at $9.06. Jan. soybean futures closed 22¢ higher at $9.19 1/4.

Dec. wheat futures closed 8 1/2¢ higher at $4.95 3/4.



December soymeal futures closed $5.90 per short ton higher at $301.00.

 December soy oil futures finished $0.24 higher at 29.08¢ per pound.



In the outside markets, the NYMEX crude oil market is $1.38 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 156 points higher.

Mike

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At 11am:

USDA SAYS:

As a result, the soybean market jumped up 20¢ per bushel, corn up 10¢.

In its Quarterly Grain Stocks Report Monday, the USDA pegged the U.S. corn supply, as of Sept. 1, at 2.11 billion bushels. The trade expected the USDA to print stocks at 2.428 billion bushels.

For soybeans, stocks were pegged at 913 million bushels vs. the average trade estimate of 982 million bushels.

USDA placed Sept. 1 wheat stocks at 2.38 billion bushels vs. the average trade estimate at 2.318 billion.

U.S. Wheat Production

Separately, the USDA pegged the 2019/20 U.S. All Wheat production at 1.962 billion bushels vs. the average trade estimate of 1.968 billion bushels.

U.S. Soybean Crop Size

In its report Monday, the USDA pegged the U..S. 2018/19 soybean crop at 4.428 billion bushels, lower than the trade’s expectation of 4.52 billion and its previous estimate of 4.55 billion bushels.

Trade Reaction

--Jason Roose, U.S. Commodities, says that today’s market liked the friendly report data.

“With large stocks anticipated in today's USDA crop report, finally a bullish crop report. USDA released a much lower stocks number on corn, with increased feed usage. For soybeans, stocks were lowered with a revision from 2018 bean production. All eyes will now be on the weather forecast, as very little risk premium is dialed in the market with a poor start to harvest,” Roose says.

--Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that corn and beans are both higher, after report estimates came in less than the low end of the trade estimates.

“With soybeans having a strong end to the marketing year in both exports and crushings, a number towards the lower end of the spectrum is not shocking. We do have to view soybean ending stocks properly, at 913 million bushels! Last year ending stocks were 438 million, the record prior that was back in 2005/2006. That year stocks to use was at 15.6% and the average farm price received for soybeans was $5.66. Now, I am not suggesting that we are going to $6 beans, but we should view these moves back over $9 as selling opportunities. Since the start of the trade war with China November 2019 soybeans have struggled to move beyond $9.60 futures,” O’Connell.

O’Connell added, “The lower than anticipated stocks on corn came as more of a surprise and leaves me wondering where the cuts will be taken. I assume feed and residual use given the bleeding state of the ethanol industry and the poor export performance, as of late.”
O’Connell sees this rally as one that should be sold.
“As we near the gap that was left post Aug 12 report, 3.9275-3.88, moves beyond that will take greater conviction from the fund community to dump their shorts - they are currently 160,000 contracts short. $4 will be met with both farmer selling and psychological push back,” O’Connell says.

--Louise Gartner, Spectrum Commodities, says that it looks like corn and beans are the winners in this report.

“Corn stocks at 320 million less than expected is a big number. Soybeans 70 million less is positive as well. Wheat stocks were a bit higher than expected, 65 million higher,” Gartner says.
Hard red winter wheat is supported with 11 million less than expected, while soft red was 3 million higher, Gartner says.

“So, I see the KW/W spread recovering a bit on that news,” Gartner says.

Gartner added, “The market expected USDA to lower spring wheat production due to the rains, but it increased it by 3 million, a 15 million bushels swing from expectations. But Minneapolis is still holding the leadership of the wheat complex. USDA didn’t decrease durum production like the trade expected. So, it’s supportive to row crops and slightly supportive to hard red winter wheat.”

 

 

What say you?

 

 

Mike

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At 8:40am:

In early trading, the Dec. corn futures are 3/4¢ higher at $3.72 1/4. March corn futures are 3/4¢ higher at $3.84 1/2.

Nov. soybean futures are 7 1/2¢ higher at $8.90 1/4. Jan. soybean futures are 7¢ higher at $9.04 1/4.

Dec. wheat futures are 1/2¢ higher at $4.87 1/4.



December soymeal futures are $2.60 per short ton higher at $297.70.

 December soy oil futures are $0.04 higher at 28.88¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.69 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 89 points higher.

On Monday, private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tons of corn for delivery to Mexico during the 2019/2020 marketing year.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that tAll attention today is on the USDA Grain Stocks report to be released at 11:00:00 AM.

“The USDA report today may be negative for corn. The USDA has consistently overstated feed usage in the last several years. On the bullish side, I think last year’s soybean crop may have been overstated, as well. That will take ending stocks lower than expected. However, I also know it is dangerous to make predictions about the USDA Grain Stocks report in the hours before the report,” Kluis told customers in a daily note.

 

Thanks,

 

Mike

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2 Replies
Veteran Advisor

Re: Floor Talk, September 30, 2019 (Report Day)

 

The Big lower crop sizes are supposedly yet to be discovered.  LoL. 

Grains have just started Major Ups now. 

Say 130 to 150% higher in the next 60 days for All the grains. 

Enjoy it. 

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Honored Advisor

Re: Floor Talk, September 30, 2019 (Report Day)

Al needs to go with his gut.......”predictions are dangerous hours before a USDA report.”

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