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Veteran Advisor

From the floor April 18

After the close:

On Monday, USDA says 7% of the U.S. corn planting is complete, way below 16% a year ago, and slightly below an 8% five-year average. Some analyst expected the number to be 9%.


---Separately, for Texas, there is a report out that estimates that drought-weather has cut that state's wheat production in half.




At the close:

The July corn futures settled 10 cents higher at $7.59 1/2. The July soybean contract closed 12 1/2 cents higher at $13.55 3/4. The May wheat futures settled 30 3/4 cents higher at $7.75. The May soymeal futures closed $2.60 per short ton higher at $347.80. The May soyoil futures ended $0.55 higher at $57.39.

In the outside markets, the NYMEX crude oil is $2.34 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 203 points.


Dry weather concerns pushed wheat higher. Cold, wet, and snowy weather sent corn and soybeans higher, traders say. Funds bought 12,000 corn contracts, 5,000 wheat, and soybeans 4,000.


One analyst says, "The funds or someone was buying for sure. But it was mostly a weather market, lots of dry weather in the southern Plains hurting wheat there and lots of rain in the northern Plains and Midwest keeping farmers out of the fields. 
Also, talk that Russia said it would not export wheat until at least July, supported wheat. "There will be controls even then as they work out of the disaster of last year. There had been talk that exports would resume freely as soon as early June, but Russia says no."
On Monday, you could really see the weather market in corn and beans, he says. "New crop corn was the leader on the upside, and in contrast the new crop beans had a tough time with upside.  That was weather, no doubt about it!"




Easter Holiday Notice:

The CME Group will maintain normal trading hours this Thursday. However, all open outcry trading floor products will be closed Friday.




At 11:40am:

The traders want to talk weather. In fact, one trader said he flagged down a few farmers working in the field, this weekend, in Illinois. The farmers told the trader they are worried about too cold of soil temps. Also, will corn-on-corn planting create lower yields? Another trader that has a farm in southern Illinois, with planting completed, says his on-farm manager called and said temps are expected to be around mid-30's this week. He's nervous.


Meanwhile, another trader handed me this: "A University of Illinois study shows that when wholesale gasoline prices are $3.00/gallon, the shutdown price of corn for ethanol plants is $9.78/bushel. When gasoline is $2.50/gallon, the shutdown price is $7.84/bushel. Gasoline at $3.50 raises the shutdown price to $11.72."


Personally, I paid $4.19 per gallon for Chicago gasoline this weekend.




At 10:35am:

July corn is 4 1/2 cents higher, soybeans up 9 cents and May wheat is up 30 cents.


The floor is generally quiet though. After a lower start, buying came in. One floor corn pit trader says, "Resistance in the $7.57 1/4 to $7.58 1/2 and 7.63 1/2 area. If we get above the $7.65 area as well, we will have some decent upside targets as well today."


Yet another floor trader sums up the market like this. In his own words: "People came in and bought this market, and why wouldn't they? With the weather like it is, Minnesota and the Dakota farmers are looking at May 10 before they can get in and plant. That tells me December corn is worth more than $6.65. Who's interested in the front-months now, other than the funds. We have enough supply for summer. Wheat is dynamic, name a country and there is wheat crop stress. Plus, the outsides are not favorable, yet we are higher. That tells you we are not listening to falling crude oil and Dow markets, and a higher dollar. This is a weather market."




At the open:

The July corn futures opened 8 cents lower at $7.41 1/2. The July soybean contract opened 11 cents lower at $13.32. The July wheat futures opened 5 1/2 cents higher at $7.85 1/4. The July soybean meal futures opened $1.00 per short ton lower at $349.50. The July soyoil futures opened $0.32 lower at $57.12

In the outside markets, the NYMEX crude oil is $2.65 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 193 points.




At 9:25am:

This is the opening statement of the Freese-Notis weather report Monday. This is a significant statement, in a year that the market expects big corn, soybean crops.


"When it comes to the weather for the second half of April, what we have in store this year for the Nation's midsection is about as bad as one could imagine for fieldwork. Extended periods of dry weather during that time frame are completely out of the question, and even stringing together as little as two straight days of completely dry weather is going to be a real chore."




At 7:10am:

Fundamentally, the 2-3 inches of snowfall in Minnesota and about 1 inch in Chicago, here, seems to give the market a bullish reason to trade higher, with thoughts of delayed planting. 

Technically, one corn trader says, "Rollover to the July contract is well underway by some traders.  After making new highs in the electronic trade last Sunday night, the market generally traded from the short side last week.  It traded into a small gap area but has fallen slightly short of the gap close area at $7.43.  There is a larger gap area which begins at $7.34 3/4 which we left from last month.  Gaps don’t necessarily have to be filled within a certain time frame but we will monitor for possible short trades if the market should trade into this gap area(s).  On the other hand, there is also a pattern which suggests a move back to the $7.60 area at some point during the week."




At 7am:

Early calls: Corn 1-2 cents lower, soybeans 1-2 cents higher and wheat 8-10 cents higher.


Overnight grain, soybean markets=Trading mostly higher.

Crude Oil=$1.32 lower.


Wall Street=Seen trading lower as China lifts its bank reserve requirements for the fourth time this year.  

World Markets=Lower.



More in a minute,


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2 Replies

Re: From the floor April 18

Just a comment!!

The Finns voted for more power to the nation and they are not happy with paying for Portugal.

That sent a message to EU that they cant do whatever with money they don`t have!!

Euro down!!!!!!!!!!

That together with intenceifiing drought in Fra Ger and northern Poland made impression i Paris with wheat up without strong gain from CBOT overnight!!!

Barley is mostly seeded in EU and corn just started...

To early to say huge problems but heat is soon or later comming  and April is huge deficict on rain!!

I am going to seed springwheat wishes

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Veteran Advisor

Re: From the floor April 18



I'm reading, this morning, that Russia is not likely to lift its wheat ban until July. There was talk that country might allow wheat exports before that. The new crop is estimated slightly higher than annual consumption. So, it looks like the wheat problem is not solved there, yet.



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