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Veteran Advisor

From the floor April 20

At the close:

The July corn futures settled 16 1/2 cents lower at $7.40 1/2. The July soybean contract ended 15 1/4 cents higher at $13.69 1/4. The July wheat futures settled 1/4 of a cent lower at $8.20 3/4. The May soybean meal futures settled $2.70 per short ton higher at $354.60. The May soyoil futures settled $0.63 higher at $58.79.
In the outside markets, the NYMEX crude oil is $3.18 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 181 points.

 

Profit-taking set in as the traders look ahead to a shortened week. Plus, an improved weather forecast pressured corn prices. On Friday, the CME Group grain markets will be closed.

 

Wheat Options Talk: One trader says, "One thing seems pretty evident, to those who know this arena and know how the underlying (wheat futures market) has been behaving of late.  Come Monday, you can almost guarantee we'll see a big move, with June options providing the best gamma for your buck with the new front month being July futures." 


Mike

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At mid-session:

The July corn futures trade 6 1/2 cents higher at $7.63 1/2. The July soybean contract is 26 cents higher at $13.80. The July wheat futures are 14 cents higher at $8.35. The May soybean meal futures are $5.00 per short ton higher at $351.40. The May soyoil futures are $1.17 higher at $58.70.
In the outside markets, the NYMEX crude oil is $3.07 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 177 points.


One analyst says, "India is talking about exporting anyway and I doubt Russia is going to do a thing until they are ready, which will be later this summer.  Longer term, no, I don't think the request means anything.  Export bans were put in place because there was not a lot of grain, not for punitive reasons.  For today, this is part weather and part the Dollar.  It looks like the dollar might have started a new leg down to give a hard test of the bottoming range from 2008.  So, that should tend to keep the markets we are interested in with some support.  The weather is the rest of the story and the weather is not good here or really anywhere.  Any changes in these two factors will start to make the markets weaker longer term, but markets should find support until or if those events happen.  There could be some profit taking tomorrow, though.  I am trying to sell a little higher today with that idea in mind."

 

Meanwhile, a corn trader says, "Yes kind of has that same feeling here. There was a trend line break to upside with possible $7.85 objective may still go before retreating. If we do get below $7.65 could sell off a little but still overall bullish."

 


Mike

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At the open:

The July corn futures opened 16 cents higher at $7.73. The July soybean contract opened 21 cents higher at $13.75. The July wheat futures opened 20 3/4 cents higher at $8.42. The July soybean meal futures opened $3.50 per short ton higher at $355.50. The July soyoil futures opened $0.89 higher at $59.05.


In the outside markets, the NYMEX crude oil is $1.41 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 189 points.

 

Mike

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At 7:20am:

News Nuggets:

--International Grains Council estimates world corn output up 5% to a record 847 mln tons, wheat at 672 mln tons.

--In Asia, wheat tested $8.20 Wednesday.

--Japan seeks 200,000 tons of feed barley.

--Yesterday, I was told the United Nations is concerned about countries that are holding grain export bans. The analyst said this issue will trump this bad planting weather. Today, India's Farm Minister says his country should lift their export ban on 2.0 million metric tons of wheat and rice. India's warehouses are bulging with stocks, and a new crop is coming on, according to a Dow Jones Newswire story.

--Conflicting reports out of China. First, the China National Grain & Oil information center (CNGOIC) says because its supply/demand sheet is balanced, China has great potential to raise more corn this year. Meanwhile, a Chinese grain trader group (Cofco Group) says Wednesday a corn supply shortage is coming for the next 10 years. Corn is the government's biggest problem for regulating grain markets, the Dow Jones Newswire story says. What is it? Is there not a corn shortage now, but starting next year there will be? I'm confused.

 

Mike

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At 6:30am:

Early calls: Corn 13-15 cents higher, soybeans 12-14 cents higher and wheat 12-14 cents higher.


Trackers:

Overnight grain, soybean markets=Trading sharply higher.

Crude Oil=$1.37 higher.

Dollar=Lower.

Wall Street=Seen trading higher after strong corporate earnings from Goldman Sachs, IBM, Intel. Also, retailers' business continues upward, according to a weekly report. This indicates rising gas prices have not had an impact on consumer spending. Plus, March home building numbers were up.  

World Markets=Higher.

 

Note: More rain and wind in Chicago, today. What a storm last night. This place is drenched. And it's raining again this morning.

 

 

More in a minute,


Mike

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18 Replies
Advisor

Re: From the floor April 20

  1.6" rain since Sunday and more predicted.   Any April planting is iffy.  Not a lot of ponding in fields but some.

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Veteran Advisor

Re: From the floor April 20

Well Mike at the high point yesterday we had 6 inches on the ground! Woke up this morning to a scene very similar to yesterdays pic. two weeks from planitng here is optimistic. 

Bright side of things is that we did get snow on the oats!

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Frequent Contributor

Re: From the floor April 20

JRS, what part of the country are you from?  I have an uncle who farms in NW Iowa, but havent talked to him for a few months to see whats going on there.  Thanks.

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Veteran Advisor

Re: From the floor April 20

Kossuth county Iowa.  NC part of the state.

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Veteran Advisor

Re: From the floor April 20

Marketeye----welcome to the world of China watching....as little as 3-4 months ago they were trying to convice the world their 2010  corn crop was 172 MMT, maybe higher......came in at 168 MMT.....

 

considering how much corn they have sold out of reserve stocks in past 12-24 months, they probably need a couple of plan B's to keep it all working over there...

 

for me, the following statement applies: "watch what they do, not what they say"

 

they are sharp, just not infallible

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Friend

Re: From the floor April 20

We woke up with 3 inches of snow on the ground yesterday morning and didn't make it out of the 30's.  Ground temperature last week was 37 degrees.....  They are talking rain for about a week, so I'm guessing that we won't be planting any time soon. By the way, a few guys started planting 10 days ago, I guess you have to start early if you want to do it all over.  I"m from Northwest Iowa.

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Veteran Advisor

Re: From the floor April 20

I agree Ray. The Chinese are really trying to headfake the markets. The problem is there headfakes are getting old and telegraphed.

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Senior Contributor

Re: From the floor April 20

 
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Veteran Advisor

Re: From the floor April 20

IhMarty,

 

Responding to the talk of the United Nations wanting these countries with exports bans to consider lifting them, one analyst says even if the Russian ban is lifted, they don't sell a lot because they are fighting food inflation over there. He says, "If Russia had excess supplies, they would have already lifted the ban. India, different story. That would be more negative.
Today's grain rally is a weather question. I believe for corn we have built into price a lot of delayed planting, so I see profit taking in the corn. Beans would benefit from this as they have been held down because of more potential acres. Also hearing concerns about canola acres not getting planted in the Dakotas and Canadian Prairies supporting beans.

 

IhMarty, what do you think about it?

 

Mike

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