Floor Talk September 30 (Report Day)

[marketeye]

At the close:

The December corn futures closed 5 cents lower at $3.20 per bushel.

November soybean futures ended 10 1/4 cents lower at $9.13.

December wheat futures settled 3 1/2 cents lower at $4.77 3/4.

For Dec. soybean meal futures, the contract closed $5.00 per short ton lower at $298.90; Dec. soybean oil futures settled $0.58 lower at $32.37.

In the outside markets, the crude oil is $0.03 per barrel lower, the dollar is higher, and the Dow Jones Industrials are 21 points lower.

Dustin Johnson, EHedger grain analyst, says that soybeans settled lower, despite the friendly stocks number, because at the end of the day the reduction to next year's carryout is minimal. 

"We are debating if the final national average yield will shatter the previous record by over 5 bushels an acre, on record bean acres.  The ongoing record yield reports are still overshadowing this news.
Johnson adds, "For corn, it was obviously a little bearish to see an increase to ending stocks but not outside the range of estimates.  We don't believe this is significant either.  The real reason the market has broke nearly 25% this quarter is because of the record yield reports."

Mike

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At 12-Noon:

Soybeans have turned 4 cents higher. Wheat and corn are off their lows.

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At mid-session:

The December corn futures are trading 4 1/4 cents lower at $3.21 per bushel.

November soybean futures are trading 5 1/2 cents lower at $9.18.

December wheat futures are 7 3/4 cents lower at $4.73.

For Dec. soybean meal futures, the contract is $2.60 per short ton lower at $301.30; Dec. soybean oil futures are trading $0.36 lower at $32.59.

In the outside markets, the crude oil is $0.36 per barrel lowe, the dollar is higher, and the Dow Jones Industrials are 9 points higher.

Mike

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USDA Quarterly Stocks Report Says:

As of Sept. 1:

Corn= 1.24 billion bushels, vs. the trade’s expectations between 1.02-1.35 billion bushels, and 821 million at this same time last year.

Soybean stocks=  92.0 million bushels vs. the trade’s expectations of 100-150 million and 141 million a year ago.

Wheat stocks=  1.91 billion bushels, compared to the trade’s range of expectations of between 1.7-1.98 billion and 1.87 billion a year ago.

What do you think? Bullish beans?

TRADE REACTION

--Peter Meyer, PIRA Energy Grain Analyst, says that this is the first time we’ve seen soybean stocks below 100 million bushels, implying the pipeline is more narrow than historically believed. 
“It really shouldn’t be that big of a surprise given the enormous quick ship premiums we’ve seen recently in advance of harvest.  The 2013 crop size was raised by 69 million bushels on a combination of 384K additional harvested acres and a 44 bpa “final” yield.
 
Meyer adds, "In corn, 2014 saw the highest disappearance rate for the June to August quarter, yet ending stocks were 55 million bushels higher than estimates.  Last year’s crop size didn’t change, so the implication is that feed demand was overstated in the 2013/’14 marketing year at  5.175 billion bushels.  While 55 million bushels may not make a lot of difference, it surely doesn’t help and price recovery prospects given the huge 2014 corn crop being currently harvested.  We expect that Feed and Residual demand for the 2014/’15 Marketing Year will be lowered in the October WASDE as a result of this decrease last year.  5.325 billion in Feed and Residual use for 2014/’15 has been questioned by more than a few since the last WASDE and should be lowered in the upcoming WASDE,” Meyer says.

--Jacob Burks, First Capitol Ag, says the report should be helping bean prices. "Surprised beans are still lower.  We came in below all expectations and are still 10 lower."

--Jason Ward, Director of Grains and Energy for Northstar Commodity, says the report is bullish for beans. "Corn stocks 1.236 billion bushels, an increase of 55 million bushels, so this just adds to an already large forecast carryout for 2014/2015. Not too surprised to see corn make new lows. Now, watch the price today, whenever you make new lows on a bearish report you have to take note of it, might be putting in a low in the market. We are still biasing that low to be 2 weeks from now, but trade action will dictate that low.
 
Soybeans stocks were JUST 92 million bushels, wow, much tighter than expected. Thus far the trade action has been 10 lower to 2 cents lower, back to 12-13 lower back to 9 cents lower. Watch the lows from Sunday night at $9.05, if they hold, some end of month/end of quarter profit taking could still occur. This stock number lowers the carryin for soybeans by 40-50 million bushels, or roughly 0.56 bushels/acre, so basically we lost a half bushel/acre of the crop coming in due to there being less old crop than expected.
 
Wheat stocks = 1.914 billion bushels, above the trade estimate by 34 million bushels, and will do nothing to support wheat prices," Ward says.
 

--Jack Scoville, PRICE Futures Group vice-president, says the stocks report is negative to corn, stocks were higher than expected. 
“And, we skated through on the soybeans, although the situation was extremely tight.  You would think the bean number would be bullish for the market. But, hey, we are at harvest and it is kind of old news.  I mean we spent months at 120 to 150, with no beans. So, I kind of think the trade would sell any buying, due to the number, as we got some new supplies coming in as we speak.  But it was the only real bullish number out there."

Scoville adds, "The wheat production and stocks data were neutral to negative in my opinion.  I think the markets will generally work lower, anyway, with beans still the leader.  There is nothing in any of these numbers to fundamentally change anything and the trends are still down.  I  think we will be back to harvest progress by the time you get this out to the masses.  Some interruptions over the next few days, but otherwise no real worries out there.”

Mike

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At the open:

The December corn futures are trading 1 cent lower at $3.24 per bushel.

November soybean futures are trading 7 cents lower at $9.15.

December wheat futures are 5 cents lower at $4.75.

In the outside markets, the crude oil is $0.15 per barrel higher, the dollar is lower, and the Dow Jones Industrials are 15 points higher.

Mike

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At 7:55am:

Early calls: Corn is 1-2 cents lower, soybeans 5-7 cents lower, and wheat 4-6 cents lower.

Trackers:
Overnight grain, soybean markets = Trading lower.
Brent Crude Oil = $0.0 2per barrel higher.
Dollar = Higher
Wall Street = Seen higher, as the tech companies report earnings.
World Markets = Europe stocks were mostly higher, Asia/Pacific stocks were lower.

More in a minute,

Mike

[giolucas]

What is moving this soybean market right now?

[marketeye]

gio,

Look at that soybean stocks estimate. WoW!! That is probably what is moving it.

Mike

[farmerguy89]

The first number under 100!

[giolucas]

Mike,

Just saw that thanks.

[roarintiger1]

For all of the empty soybean bins across the USA, 92 million bushels that were supposedly left over is a lot of beans to hide.  I wonder where they were?

[Palouser]

There are always stores of grain that are impossible to draw out onto the markety in the US. Some are those who have a 'plan', tax reasons, and probably more is tied up in estates and probate than we realize. Some is literally forgotten. I've been reminded more than once about small lots left over from sales or deliveries that I remembered for awhile and then lost track of. It's never been much but I know I'm not the only one. I've seen wheat stored for 5 years or more in bins, especially by those pretty well set, that there is no expediency to sell and maybe part of a 'master plan' by habit or on purpose. You'll always find some in Montana where scrimping and hoarding in home storage are the tools that enables survival during times of drought and/or poor prices.

[elcheapo]

Beans should have rallied today, no s or ends
About it, half of what we had this tlme last
Year, and the price we are at now. Replug
The numbers into the grand formula.

This demonstrates that the market is
no longer the market, but rather "electronic trading platform".....there is a disconnect
Between the real world compaired to
"The trade"
The question begs to be asked, should we
Change the way we obtain the price for
our crop insurance. The "markets are not
The markets". Supply and demand used
To be the drive of the market, today it
Is the chart formations, and technical anyls
Of the movement.

Amazing, how can the trade have estimates,
Yet we farmers that "are out there", our
Estimates are not given credence.

You know, it would be fully level if another
Board of trade would Starr operation.

I though this was a free market....we are
Preached since small competition is good.

The cme is the only game in town, they are
A stock, for.private stock company.

What we we say if this was in any other
industry.......

Something to ponder.

[sw363535]

So much excitement over such small numbers

I appreciate his quote

"For corn, it was obviously a little bearish to see an increase to ending stocks but not outside the range of estimates.  We don't believe this is significant either.  The real reason the market has broke nearly 25% this quarter is because of the record yield reports."

No one cares about the actual harvest ------ only the report of future possibilities ------ This country needs a "time out".

[sw363535]

Elcheapo,

You are too kind ------ it is an electronic gambling platform.  Real numbers are just not important.