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marketeye
Veteran Advisor

From the floor August 10

At the close:

The Dec. corn futures settled unchanged at $6.88 1/2. The Nov. soybean contract settled 1 3/4 cents higher at $13.01 1/2. The Sep. wheat futures closed 13 1/4 cents higher at $6.85. The Dec. soybean meal futures contract ended $2.00 per short ton higher at $345.60 and Dec. soyoil futures closed $0.20 lower at $53.60.

In the outside markets, the NYMEX crude oil is $2.70 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 531 points.

Mike

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At mid-session:

At mid-session, the Dec. corn futures are 4 1/4 cents higher at $6.92 1/2. The Nov. soybean contract is 1 cent higher at $13.00 3/4. The Sep. wheat futures are trading 12 cents higher at $6.83 3/4. The Dec. soybean meal futures contract is $2.80 per short ton higher at $346.40 and Dec. soyoil futures are trading $0.06 lower at $53.56.

In the outside markets, the NYMEX crude oil is $1.28 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 323 points.

One analyst says pre-report positioning and reaction to the extreme stock market movements are driving the grains. "We are seeing some people that have been buying this grain market in the last few days take some profits off the table. But, also, we are looking at the report and saying that due to the recent sell-off things could be more bullish tomorrow," he says. 

Of course, all investors are keeping a close eye on the world equity and financial markets, he says. The DOW plunged on its opening bell and that is having a negative impact on the farm markets.

"Still, you are seeing the grains hold higher due to crop-weather concerns for corn and wheat prices becoming competitive in the world export market," he says. "For soybeans, this August weather is helping that crop much more than corn."

 

Mike

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At the open:

The Dec. corn futures are 5 cents higher at $6.93 1/2. The Nov. soybean contract opened 4 1/2 cents higher at $13.03 1/2. The Sep. wheat futures opened 10 1/2 cents higher. The Sep. soybean meal futures contract opened in a range from $1.70-$2.60 per short ton higher and soyoil futures opened $0.35 higher.

 

In the outside markets, the NYMEX crude oil is $0.87 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 353 points.

 

Mike

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At 6:35am:

Early calls: Corn 7-9 cents higher, soybeans 12-14 cents higher, and wheat 10-12 cents higher.

 

Trackers:

Overnight grain, soybean markets=Trading higher.

Crude Oil=$3.17 higher.

Dollar=Higher.

Wall Street=Seen trading lower as investors pause from yesterday's stock market soaring move at the close.

World Markets=Higher.

 

Question: The general consensus for tomorrow's USDA Supply/Demand and Acreage Revisions Reports is that USDA will lower corn, soybeans and wheat production numbers. The trade is keeping a close eye on whether the USDA will print a 155.6 bushels per acre corn yield, about 2 bushels below July. Do you think they will drop corn yields that much?

 

Meanwhile, Richard Feltes, RJ O'Brien market research analyst put out a few silver bullets on tomorrow's Reports:

    •USDA Aug crop report samples 2100 corn plots, 1900 bean plots and 25,000 farmers via mail survey. USDA does not publish stalk and ear counts until Sept crop report.

    •The final corn yield has fallen below USDA's Aug estimate only 7 of last 23 years; There could be a big Aug to Final corn yield decline only if severe stress like ’93, ’95 or ’10  or if frost strikes early.  In 2010, the Aug to final corn yield declined 12.2 BPA;  the Aug to final corn yield rarely declines more than 5 BPA & most years less than 2 BPA; most Aug to final corn yields are up on average from 1-5 BPA, Feltes says.

    •The final soybean yield has fallen below USDA's August estimate in 10 of last 18 yrs.  Last year, the Aug to final bean yield declined 0.5 BPA; most Aug to final yields are up on average from 0.5-1.5 bpa. Aug to final ’03 bean yield down 6.0 BPA (ie. 408 mil bu) due to aphids and dry August.  Most down years range 0.5-2.5 BPA.

    •History shows that big swings in USDA Aug corn/soy production vs. trade expectations prompts large price moves. 

    •Final US new crop soybean demand has exceeded the prior year USDA Aug forecast in 6 of the last 8 years.
   

    •Final US new crop corn demand has fallen short of the prior year USDA Aug forecast in 6 of the last 9 years.

 

More in a minute,

 

Mike

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15 Replies
marketeye
Veteran Advisor

Re: From the floor August 10

Your 2¢ worth:

 

I have seen two separate analysts say that Iowa's corn crop is in jeopardy if rain doesn't show up soon. However, I just talked to a central Iowa farmer that says his farm received a nice soaker last weekend. I'm confused. What say you Iowa farmers on this?

 

Thanks,

 

Mike

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roarintiger1
Honored Advisor

Re: From the floor August 10

IMO, I doubt they lower the yield estimate that much. If they do, they will also lower demand or increase acres. I believe they will still estimate a corn crop of 13 billion bushels. In any case, the carryout will still be estimated at a comfortable number.

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small dog
Contributor

Re: From the floor August 10

We are in NW Iowa allthe rain we had earlier and now big cracks are showing up we need one more rain to finish the corn and the beans

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Canuck_2
Senior Contributor

Re: From the floor August 10

I have no idea about Iowa but just an observation from Ontario.

Here we live and survive on 'showers' through the summer. Seldom get rains that cover the whole area.

This means a patch of rain moves through, often with thunderstorms included, which gives some people too much rain and others not enough. If you are lucky you are in between and get just what you need.

I have been in the dry pocket in the past when we could see it raining, and indeed hear it on the neighbours corn one day, but we did not get any measrable amount. We went 12 weeks from mid May to end of July with less than 10 mm while others not far away had enough.

We had 50% yields while 1 km up the road they had average to above average yields.

I have been rained out hauling manure near the front of the farm and switched to the back where it missed the rain.

So IF Iowa is at all similar to Ontario it could be really hard to calculate just how many fields missed the rain and how many got enough.

At least until the combines roll everyone is guessing and looking out their back door will not give a good answer unless you have a BIG sample.

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marketeye
Veteran Advisor

Re: From the floor August 10

roarintiger1,

 

Let me ask you something. Will you make any cash grain sales or future or option moves based on this report tomorrow? I'm curious if you are just waiting for something to happen so you can pull the trigger on a risk management maneuver? Or, is your marketing plan set up such that you're just going to read the "box scores", so to speak, tomorrow?

 

Thanks for sharing,

 

Mike

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Jeff71
Senior Reader

Re: From the floor August 10

Just got this ICM update from Roger Elmore and Elwynn Taylor.   http://www.extension.iastate.edu/CropNews/2011/0809elmoretaylor.htm        Using the information provided for my location, the heat has been worse than last year. We had more soil moisture when the heat came this year and I did not observe as much leaf rolling as last year, Yesterday I pulled a few ears and found tip back in an early 94 day variety with a few ears begginning to dent. Later varieties showed less tip back. Kernal depth and test weight are yet to be determined. Last year all varieties I planted showed tip back and  yields were disappointing by 25 bushels or so. Weather looks more favorable from here on out for this crop but how much damage has been done?

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p-oed Farmer
Senior Contributor

Re: From the floor August 10

Mike..... I feel that there is more risk for the end user tomorrow that the producer...... If the # is larger than people think...... I think that there are A LOT of people that want to buy a lower market tomorrow...... With that being said...... I am giving the USDA a little more credit than most in saying they will be closer to the actual yield than most are trading......( Translation...... They will find a lot of the heat damage and it will show up tomorrow)......I think that most have forgot about the resurvey ....... Acres might be a big surprise tomorrow also..... As always..... we shall see.......p-oed

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roarintiger1
Honored Advisor

Re: From the floor August 10

Mike, I will be waiting on the sidelines until after the report. My marketing plan includes several tools...including a hammer.  🙂

 

In the big picture of marketing, it might be better to be lucky, than to be good.  I, am usually neither.

 

I do think that opportunities will present themselves for very nice sales levels after harvest.... Of course, there are bills to pay until then and the way it looks, folks around this part of NW Ohio  will not have enough storage.

 

BTW, Thanks for your input on this site!

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Re: From the floor August 10

I guess my question where you come up with 155.6? Smiley Indifferent But beyond that, we have to understand the methodology of the report.  USDA interviews producer (opinion) of their yields, which should lean towards the lower end of the spectrum (too much publicity of lower yield - hear say, cause producers don't check their yields typically as the fear the unknown), satellite imaginary should reflect a better picture, but if they look at population, which is high, hence they should be rather close this time due to this blend???? Now whether they are above or below your "magical" number, who knows?  I yet to find anyone that can consistently peg a corn yield in a single field let alone 92 million (give or take) acres. Smiley Mad

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