Floor Talk September 8, 2020
At the close:
At the close, the Dec. corn futures finished 3 3/4¢ higher at $3.61 3/4 1/4. March corn futures finished 3 1/2¢ higher at $3.72.
Nov. soybean futures closed 5¢ higher at $9.73. January soybean futures ended 4 3/4¢ higher at $9.78 1/4.
Dec. wheat futures closed 6¢ lower at $5.44.
Dec. soymeal futures settled $2.60 per short ton lower at $314.60. Dec. soy oil futures closed $0.51 cent higher at 33.40¢ per pound.
In the outside markets, the NYMEX crude oil market is $2.80 per barrel lower at $36.97. The U.S. dollar is higher, and the Dow Jones Industrials are 641 points lower.
At midsession, the Dec. corn futures are 1 1/4¢ higher at $3.59 1/4. March corn futures are 1¢ higher at $3.69.
Nov. soybean futures are unchanged at $9.68. January soybean futures are 1/2¢ higher at $9.74.
Dec. wheat futures are 6¢ lower at $5.44.
Dec. soymeal futures are $1.90 per short ton lower at $315.30. Dec. soy oil futures are $0.27 cent higher at 33.16¢ per pound.
In the outside markets, the NYMEX crude oil market is $3.44 per barrel lower at $36.33. The U.S. dollar is higher, and the Dow Jones Industrials are 505 points lower.
Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that Corn and soybean markets are trading either side of unchanged after the long holiday weekend.
"With weather no longer having much of an impact of yield potential and crop condition scores becoming irrelevant, the market this week is focused on the upcoming WASDE that will be released Friday at 11:00 CST.
The trade has already priced in yield reductions in both markets, due largely to a hot and dry weather pattern that lingered across much of the Midwest in the month of August, O'Connell says.
"The supply side of the equation is also lending some support, with China continuing a steady cadence of both soybean and corn purchases. Rumors continue to circulate regarding the crop damage within China, due to severe flooding for much of the growing season," she says.
For the 2020/2021 marketing year, 11.093 million tonnes of U.S. exports are attributed to China, including the assumed as "unknown", according to O'Connell.
"Should China experience a mediocre crop and continue to buy U.S. corn, that would certainly go a long way in helping reduce our projected ending stocks. With harvest on the horizon and the funds carrying a long position in both corn and soybeans, we are looking for a sideways trade into Friday, she says.
1. Ag markets trend higher, dollar higher
In overnight trading, the Dec. corn futures are 1/4¢ higher at $3.58 1/2. March corn futures 1/4¢ higher at $3.68 3/4.
Nov. soybean futures are 1 1/4¢ higher at $9.69 1/4. January soybean futures are 1 1/2¢ higher at $9.75.
Dec. wheat futures are 5 3/4¢ lower at $5.44 1/2.
Dec. soymeal futures are $2.00 per short ton lower at $315.20. Dec. soy oil futures are 0.42 cent higher at 33.31¢ per pound. In the outside markets, the U.S. dollar is higher, and the Dow Jones Industrials are bracing for a lower trade.
Al Kluis, Kluis Advisors, says that wheat is leading the markets, this week.
“The USDA Crop Progress report today will show corn and soybean conditions 1 to 2 percentage lower than last week. I expect both Iowa and Illinois ratings to take a hit as the dry pattern has expanded into northern Illinois. Ratings are very close to falling below last year’s level for this week, ” Kluis stated in a daily note to customers.
2. Funds get long the corn market
On Friday, the CFTC released its Commitments of Traders Report showing the outside investors getting long the corn market for the first time this year.
Friday's data is the latest trading positions of managed money funds since Sept.1, 2020. For corn, the funds are now long the market by 18,659 contracts. When the positions of managed money, producers and commercials are combined investors are long the corn market by 80,100 futures and options contracts.
For soybeans, the funds are long the market by 162,607 contracts. And, for wheat, the outside investors are long the market by 32,500 contracts.
Arlan Suderman, Chief Commodities Economist, StoneX Group Inc., says that heading into September, the COT Report showed hedge funds' net positions of corn, soybeans, Chicago wheat and Kansas City wheat went positive for the first time in over two years.
"Hedge funds are getting more active in the commodities sector. Their ownership, as a percent of open interest, went up to 40% between 2014-2017. Before that time period, hedge funds had 27% of ownership open interest. And now, that figure is climbing slightly. It's the beginning of a turn higher, Suderman says.
3. Freeze warnings for Nebraska, Minnesota
On Tuesday, the National Weather Service (NWS)says that Canadian air surging south through the Plains, Rockies, Intermountain West and West is causing temperatures to significantly cool down.
In fact, the front will spread snow across the Northern Rockies/Central Rockies.
"Several locations could accumulate amounts of 6+ inches with 1 to 2 feet in the highest peaks. Winter Storm Warnings and Weather Advisories are scattered across the Rockies from southern Montana to southern Colorado. Freeze Warnings, Frost Advisories and Freeze Watches are in effect across western Montana, northern Idaho, eastern Colorado, western Nebraska, North Dakota and and northern Minnesota. As this cooler airmass settles into the Pacific Northwest and Great Basin the recent heat wave will relax, allowing daily temperatures to moderate," the NWS stated in its early morning forecast Tuesday.
NWS forecasters added, "The cold front will continue to slowly push east through the end of the week, providing a focus for heavy rain and thunderstorms along and ahead of the front- especially for the Southern Plains and central U.S. A swath of heavy rain can also be expected across the upper Midwest north of the sharp front."
Re: Floor Talk September 8, 2020
Energy taking a hit today.(crude oil)
$36 and change little bit ago.
Hard to have vibrant E industry with really cheap oil.
Re: Floor Talk September 8, 2020
A lot of renewable energy going up in smoke should help oil eventually as Antifa fires up moms car for the election rush.
Liberal run forests.