Floor talk September 16

[marketeye]

At the close:

The Dec. corn futures settled 9 cents lower at $6.92. The Nov. soybean contract closed 3 1/4 cents lower at $13.55 1/2. The Dec. wheat futures closed 7 3/4 cents lower at $6.88 1/4. The Dec. soymeal futures closed $0.90 per short ton lower at $353.10. The Dec. soyoil futures settled $0.31 higher at $56.86.

In the outside markets, the NYMEX crude oil is $1.45 per barrel lower, the dollar is higher and the Dow Jones Industrials are up 68 points.

Farm markets settle lower Friday. One analyst summarizes the day's trade like such:

"The markets suffered from a sell-off based on technical follow-through. Once Dec. corn futures failed to hold that $7.00 mark that was a key signal for folks to sell. Fundamentally, this week's exports were strong but shipments are not going so well."
With more wheat being used to replace corn as a feedstock, corn is running into a lot of competition. Plus, with Argentina estimating record corn production this year, there is more world competition for the U.S. corn market, he says.
Meanwhile, with the soybean market shaving off nearly $1.00 since its August peak, some farmers may be wondering when their next chance to sell might be. He says to not hesitate to cash-in on these historically high prices.
"Farmers can still sell cash beans and buy a 'call' option to capture anymore upside there might be. And, it would be prudent to buy a 'put' option to protect their floor price. There are some wonderful opportunities out there, this year, for farmers," he says.

Mike

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At mid-day:

The Dec. corn futures are trading 6 1/4 cents lower at $6.94 3/4. The Nov. soybean contract is trading 4 cents lower at $13.54 3/4. The Dec. wheat futures are trading 3 cents lower at $6.93. The Dec. soymeal futures are trading $1.10 per short ton lower at $352.90. The Dec. soyoil futures are trading $0.01 higher at $56.56.

In the outside markets, the NYMEX crude oil is $1.47 per barrel lower, the dollar is higher and the Dow Jones Industrials are up 57 points.

Mike

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At the open:

The Dec. corn futures opened 2 3/4 cents higher at $7.03 3/4. The Nov. soybean contract opened 3 1/4 cents lower at $13.62 1/4. The Dec. wheat futures opened 5 cents higher at $7.01 1/4. The Dec. soymeal futures opened $1.80 per short ton higher at $355.90. The Dec. soyoil futures opened $0.13 higher at $56.68.

In the outside markets, the NYMEX crude oil is $0.32 per barrel lower, the dollar is higher and the Dow Jones Industrials are up 34 points.

Mike

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At 7:30am:

Market noise & news:

--Taiwan bought 44,100 metric tons of U.S. wheat Friday for delivery in October.

Mike

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If You Missed It:

The Farm Service Agency released acreage data Thursday afternoon. Here is what it says:

--In 2011, U.S. farmers planted 87.3 million acres of corn and 73.63 million acres of soybeans and 11.97 million acres of spring wheat. Prevented plantings totals were steady with last month at 2.99 million acres of corn, 1.44 million beans, and 2.75 million spring wheat.

One analyst is quick to remind folks that these acreage estimates can't reflect the current USDA estimates, because not all farmers are enrolled with the FSA. Nonetheless, the figures are lower than the current USDA estimates.

What say you? Telling data or not?

Mike

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At 6:51am:

How are you handling the current margin call massacre? Maybe I should ask if you are experiencing one? Since it's August peak,  the bean market has really taken a hair cut, corn looked like it was nearing that $8 mark and now is trying to avoid trading with a 6 in front of it.

What do you think? How do you set up your risk management plan to be able to weather the 'margin call' doldrums? I thought some of you vets could help out others that may be going through this for the first time or first few times. Thanks for sharing.

Mike

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At 6:25am:

Early calls: Corn is seen 4-6 cents higher, soybeans 6-8 cents higher, and wheat seen 5-7 cents higher.

Trackers:
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.17 lower.
Dollar=Higher.
Wall Street=Seen trading lower. The concern revolves around a weaker-than-expected earnings report by a big company released Friday. Plus, the Euro-zone finance ministers are meeting in Poland, attempting to find a way to ward off a default on that continent's banking system.

World Markets=Higher.

I know it was cold overnight. Anybody have a second night of hard freezing in the northern Corn Belt.

More in a minute,
 
Mike

[marketeye]

From what I can gather, it appears the temps didn't get as cold as some expected overnight. Looking forward, the weather gurus say some rain, mostly dry next week with temps normal -to-slightly below normal for the Midwest. The market may feel like the sell-off is a little overdone. Thus, higher calls have been released this morning.

Mike

[clayton58]

as a producer, if I'm hedging my crop, I will not be experiencing a margin call massacre.  That came earlier, with the market rising after sales.  I know its hard  to resist buying back horward sales when the talk is soooo bullish.  But it seems whenever I've done that the results were not good.  I had to keep telling myself  that its always most bullish at the top.  I have been long the market to cover part of my sales from time to time, butr learned I need to use a real close stop if doing that.

[marketeye]

clayton,

Are you saying you prefer to stick with your first instinct? In other words, trying to 're-market' those forward sales just doesn't work out much? Based on your experience, did this conclusion come to you after multiple attempts of buying back those forward sales, or was 'once bitten' enough?

Mike

[farmersaw]

the temps got about as expected "here"

but the frost damage vs. temps is what's got everybody surprised.

it was an impressive display of what's referred to as radiational frost.

lots of guys around here don't even know they've got a problem until they walk their fields, because they assume we didn't get cold enough, just going by air temperature.

[roarintiger1]

With that acreage number, total production at 148 bpa would be right at the 12 billion bushel mark.  Hardly a bearish number.

[marketeye]

Though we won't know until harvest, reports now have only 50 million bushels affected by the frost, not 150 million.Tim Hannagan, PFGBest.com senior grain analyst says, "The Frost and freeze event this week looks to have fallen short of a five state event but hit three with losses  up to about 50 m.b. You can't tell on Frost problems until the harvest occurs and weights of corn are down as well as beans with smaller soy oil content , so it's all farmer opinions. Were starting to hear more talk of potential problems with winter wheat planting. There's been alittle rain in Texas and Oklahoma this week  but the heat dome is expected to rebuild late next week and last into early October, continuing the historic southwestern drought. Planting in those states are well behind the ten year average."

Mike

[clayton58]

I guess I'm a slow learner, but I am sticking more with my sales.  It has taken multiple times to come to this conclusion, but I am learning that if it was good to make a sale, it is good to stick with it.  Although at times I will still try partial reownership.