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04-07-2011 06:45 AM - edited 04-07-2011 03:52 PM
Video: Looking at the fundamentals of the market: http://tinyurl.com/3cbe2uq
Pre-USDA Report Thoughts:
One analyst says the USDA's corn ending stocks number is the one to watch Friday.
"The first thing to look at is the fact that the government will put ending stocks as the minimum number they plan to use, for the year. So, whatever that number is that tells us that we're going to live with that. And we're going to have to ration from that level.
The other thing the market will be watching are the world ending stocks numbers, he says. "The market is looking for a world buffer. For instance, South America can insulate the world from a short-term soybean supply problem. But, going forward, what do the world ending stocks look like for beans, wheat and corn.
Traders are talking about the funds selling corn and buying soybeans. This is an indication of future value, he says.
One thing about funds, they are always looking for what commodity has the most value. Is one commodity more mature than the others? We see this all of the time. We have seen a setback in soybeans, so the upside potential in soybeans is less limited now than in corn."
At the close:
May corn futures settled 4 cents lower at $7.59. The May soybean
contract settled 13 cents lower at $13.63 1/2. The May wheat futures ended 9
cents lower at $7.73 1/4. The May soybean meal futures closed $4.70 per
short ton lower at $350.90. The July soyoil futures settled $0.46 lower at
In the outside markets, the NYMEX crude oil is $1.41 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 43 points.
Bullish: Rabobank sees Japan importing more U.S. ag products.
The May corn futures are 1/2 of a cent lower at $7.62 1/4. The May soybean contract is 8 cents lower at $13.68 1/2. The May wheat futures are 10 cents lower at $7.72 1/4. The May soybean meal futures are $2.70 per short ton lower at $352.90. The July soyoil futures are $0.41 lower at $58.37.
In the outside markets, the NYMEX crude oil is $0.56 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 37 points.
One corn floor trader says, "The corn market is giving back, after running strong most of the week, plus soybeans and wheat have been weak. The pullback has a little to do with tomorrow's USDA Supply/Demand expectations of ending stocks. Though the average estimate for the 2010-11 corn ending stocks number is 595 million bushels, the trade fears the government will come out with a bigger number than expected for corn.
For 2010-11 U.S. corn ending stocks, there are a lot of people that think the number should be as low as 500 million bushels or below. Meanwhile, the trade fears the government will not get close to that, he says.
"So, you see profit-taking today. Then, after this morning's good wheat export numbers sparked profit-taking, it fell, pulling corn with it."
At the open:
The May corn futures opened 8 1/2 cents higher at $7.71 1/4. The May soybean contract opened 1 cents higher at $13.78. The May wheat futures opened 6 1/4 cents higher at $7.88 1/4. The May soybean meal futures opened $0.40 per short ton higher at $356.10. The July soyoil futures opened $0.40 lower at $58.74.
In the outside markets, the NYMEX crude oil is $0.33 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 21 points.
News & Nuggets:
--Argentina's corn exports for 2011-12 are estimated at 17.2 million metric tons, and its output at 25.0 million metric tons, USDA says.
--This could be a market mover, and is something to watch. A Russian grain union is telling the government that an oversupply of wheat could become a world market problem, if the export ban is not lifted. If Russia is sitting on a bunch of wheat and floods the export market with it, you know what that means for wheat prices. Something to watch.
USDA Weekly Export Sales numbers are neutral to negative:
Corn=808,900 metric tons vs. the trade expectations of 800-900,000 metric tons (mt).
Soybeans=190,300 metric tons, below the expectations of 250-500 (mt).
Wheat=722,900 metric tons, slightly higher than the trade expectations of 250,000-700,000 mt.
Soymeal=46,200 mt, below a trade expectation of 75-150,000 (mt).
Early calls: Corn 5-7 cents higher, soybeans 3-5 cents higher and wheat 4-6 cents higher. Weekly Export Sales will be released at 7:30am CST.
Overnight grain, soybean markets=Trading higher.
Crude Oil=$0.08 higher.
Wall Street=Seen trading mixed as the European Central Bank is expected to raise interest rates, today. In the U.S., an unemployment report is being watched.
World Markets=Asia/Pacifi is mixed, Europe is mixed.
Feedback: USDA may stop producing its Weekly Crop Progress Reports. And maybe even the annual June Crops Report will be cut, under budget constraints. What do you think about not having this information anymore? What does it mean to you?
More in a minute,
04-07-2011 08:16 AM
I don't know if it will make a significant difference in how I market or perceive the crop. Even if the Govt. does cut them...the rest of the industry will just be putting out their own information..and so far, I don't think it's any more biased than the Govt.'s.....LOL
04-07-2011 01:10 PM
I believe the crop condition report is one of the most important pieces of information in a farmer's marketing arsenal. It is a standard for guaging the condition and current trends for production. It helps level the playing field between producer and buyer. Without the crop condition report a farmer is much more subject to anecdotal and 'pit' oriented stories that are often WAY off the beam. As in 'rumor'. Many buyers having physical facilities or relationships thoughout a geographical area can get a good idea of conditions and events over a wide area.
We need the crop condition report. Even if it was biweekly.
04-07-2011 01:15 PM
Hi, Mike -
Today, we have seen a "Key Reversal" in the corn market. We had a new record high, and lower low than yesterday, plus a lower close. This important technical indicator is followed by many traders, and should be an indicator of lower prices, Friday report or not...
Have you heard anything from the floor guys yet about the key reversal? - Thanx!
04-07-2011 01:42 PM
USDA quashes talk of halting crop progress report
WASHINGTON, April 7 (Reuters) - The U.S. Agriculture Department has no plans to discontinue its weekly crop progress report, a department spokesman said on Thursday.
A grains analyst told a conference in Chicago on Thursday the USDA was considering dropping the report to save money in line with efforts to trim the U.S. budget deficit.
"I haven't heard that," said Rich Holcomb at USDA's National Agricultural Statistics Service. "That's one of the most watched...I don't see that going away. That would be silly for us to get rid of."
The crop progress report is traditionally issued each Monday at 1600 EDT/2000 GMT from the beginning of April until the end of November. Analysts, traders and others in the industry watch the report closely to gauge the status and health of crops across the country.
The USDA issued its first crop progress report of 2011 on April 4.
04-07-2011 01:51 PM
There may have been a key reversal in corn, one corn floor trader says.
In his own words; "Could be, but even with all negative news and selling on close (over 3,000 contracts @ $7.69) mrkt appears to be looking for bottoms still. Let's digest today, look over a few charts, as well as USDA report. Stay tuned!"
04-07-2011 02:07 PM
Thanx, Mike -
The "Key Reversal" is based solely on numbers, which are now booked for the trade date. As to the perusing of charts and the digesting of the Friday report, I will stay tuned...but based on the numbers alone, this technical event should mean a short-term top just might be in place...we shall see! Please ask around for floor trader comments when you have a chance. --- John