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Veteran Advisor

From the floor April 11

At the close:

The May corn futures settled 8 cents higher at $7.76. The May soybean contract closed 23 3/4 cents lower at $13.68 1/2. The May wheat futures ended 3/4 of a cent higher at $7.98 1/4. The May soybean meal futures finished $7.50 per short ton lower at $349.70. The July soyoil futures closed $0.86 lower at $58.91.


In the outside markets, the NYMEX crude oil is $3.25 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 20 points.

 

Mike

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At 12-Noon;

Tody's Crop Progress Report is expected to show corn 4-6% planted. That sounds like a lot to me. I've been on the phone this morning with farm-contacts in central and southern Illinois. They all say the recent rains have knocked the farmers out of the fields until Thursday. And then another rain is expected to arrive.

 

Mike

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At 10:40am:

After starting lower, buying stepped in and corn and wheat reversed to higher. Corn is up 8 cents, wheat up 2, soybeans are 21 lower.

 

One analyst says, "We're in weather markets now. And when traders come in on Monday the first thing they do is look at the weather and its impact on early field work and planting and price it in. The current forecast suggest heavy rains in the Midwest, delaying early field work. The same conditions, in the Delta all week, delaying early planting. With historically low ending stocks of corn,
the market will be unusually sensitive to late corn planting as it suggests lower yield. Beans are trading the negative mindset of, if the month of April stays wet then there's a risk of planting more beans, it's all funds thinking the worst.
"

 

Yet a grain broker says China's talk of canceling cargoes is pressuring the soybeans. "This means the U .S. carryout could go up. Plus, COFCO, China's grain division, lowered their 2011 soybean imports by 1.0 million metric tons.

For corn, the weather is bullish. Plus, the latest CFTC report shows the funds extended their net long position last week by 30,000 contracts. The fact that the funds are getting 'heavy' again on corn is bullish," he says.


Mike

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At the open:

The May corn futures opened 1 cent lower at $7.67. The May soybean contract opened 14 1/4 cents lower at $13.78. The May wheat futures opened 2 cents lower at $7.95 1/2. The May soybean meal futures opened $4.70 per short ton lower at $352.50. The July soyoil futures opened $0.47 lower at $59.30.


In the outside markets, the NYMEX crude oil is $0.88 per barrel lower, the dollar is higher and the Dow Jones Industrials are up 34 points.

 

Mike

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At 8:06am:

There's a story on the Dow Jones Newswire indicating China may cancel some soybean cargoes, due to weak processing margins. This might be extra pressure on a soybean market that was already expected to trade lower today. What do you think? Is this announcement a shell-game tactic?

 

Mike

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At 7:45am:

Freese-Notis Weather has rain delaying Midwest corn planting later this week and possibly next week. For many, today is the first day, allowed by crop insurance, to plant corn.

 

Mike

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At 7am:

One corn floor trader says: "We expect corn to continue move higher over the coming weeks.  There are several patterns which lead us to this conclusion.  We recently had several gaps higher after the crop report.  The market has been unable to make a serious move to trade back into these gap areas (e.g. $7.25 on the open outcry charts).  Thus, when you look at the technical chart patterns,  corn could eventually attempt to trade to the target of $7.89 if the pattern is not reversed.  In addition, positive reversals on the dailies (i.e. lower values on RSI but turning from higher prices) support the bullish view for now.  We do expect a move back to $7.58, at some point this week, and will monitor for any potential bearish short-term patterns.  But the market will have to convince us that any move(s) to the downside are anything other than corrective."

 

Mike

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At 6:45am:

Early calls: Corn up 2-4 cents, soybeans 4-6 cents lower, and wheat down 1-2 cents.


Trackers:

Overnight grain, soybean markets=Trading mostly lower.

Crude Oil=$1.06 lower.

Dollar=Higher.

Wall Street=Seen trading higher as the U.S. earnings season is getting underway today. On Monday, China announced a trade deficit for the first time in seven years. 

World Markets=Mostly lower.



More in a minute,

 

Mike

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6 Replies
Senior Contributor

Re: From the floor April 11

YEP..... Why else would they even comment on anything unless it helps them(China) buy cheaper.......p-oed

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Veteran Advisor

Re: From the floor April 11

We are walking the fence here.  Fuel and Food prices are going to pressure the economy and demand......grain shortages hurt the supply.  With the forecast out this week, I don't see how we break prices until the normal June time frame at the earliest, unless  the stock market crashes.

 

 

 

A question for those a lot smarter than myself.  Can you explain why Pimco's going to cash is a move that is profitable with their view of bonds?

 

 

 

 

 

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Senior Advisor

Re: From the floor April 11

Name the last year China had a lower year on year soybean import number.

 

I have to laugh as traders who repeatedly react to a possible cancelation, or rumor of a cancelation, or reference to crush margins by thinking about lower Chinese imports of beans. Any other country it might be a factor in the over all scheme. China's imports of soy are going only one direction. Up.

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Honored Advisor

Re: From the floor April 11

jec...PIMCO is going to cash to merely preserve capital. As one of the world's best bond trading firms, and with investment guidelines that limit what they can buy, going to cash merely gives them an oportunity to repurchase bonds in the future at a lower price with higher returns. Earnings 1/2% or so in cash, is far better than losing 15% of your principal if rates head higher.

 

It is nice to see that even the best have to play defense sometimes. It merely shows that a lot of people far smarter than any of us on this site are deeply troubled by the current FED policy. They are voting with Billions, not mere thousands.

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Veteran Advisor

Re: From the floor April 11

Time, So do I understand correctly?  They are betting interest rates go up and the dollar goes up, or only rates?

TIA

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Veteran Advisor

Re: From the floor April 11

I suppose this story on the 'cuts' that took months to agree on says it all....it is just as I had feared.

 

 

http://www.kcci.com/news/27508744/detail.html

 

Pimco can see the writing on the wall.  There will be no cuts,  no change in DC.  But, they must think the dollar survives, and I think it will get slaughtered....

 

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