At the close:
The Dec corn futures settled 2 1/4 cents lower at $4.04 1/4. The Nov. soybean contract settled 5 cents higher at $10.10. The Sep. wheat futures closed 31 3/4 cents lower at $6.93 1/4. The Dec. soymeal futures contract closed $0.70 per short ton lower at $289.30. The Dec. soyoil futures contract finished 62 points higher at $41.17.
In the outside markets, the NYMEX crude oil is $2.31 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 193 points.
I know there are a lot of crop problems around the world. And the markets are trading those world crop losses. However, the dollar has dropped 7% in the past few months and the traders say another leg down is possible. The crude oil market is surging higher. And today, at least, the Dow screamed higher. So, all of these factors are very bullish for commodities.
Separately, a floor trader says the corn market's close was very disappointing. "The market knows Russian losses could be around 40%. The question is how much more loss is possible? Someone in this industry should be able to figure out the extent of further losses. Are there going to be 50-60% losses? If so, this market is not done rallying. I feel bad for those that bought this corn market at $4.17, they are getting waxed. The other thing to watch is the import activity of Russia. Will Russia import wheat, corn, etc, because of this drought? The market needs more answers to determine a more definitive direction. Some are scratching their heads, wondering just how bad Russia's problems are because they exported wheat to Egypt over the weekend for a lower price than other countries. Now wait a minute, do they have a supply problem or not? If Russia keeps exporting, this rally is over," he says.
Mike
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At mid-session:
At mid-session, the Dec corn futures are 5 1/2 cents higher at $4.12 1/4. The Nov. soybean contract is 15 cents higher at $10.20. The Sep. wheat futures are 39 cents higher at $7.00 1/2. The Dec. soymeal futures contract is $4.50 per short ton higher at $294.50. The Dec. soyoil futures contract is 69 points higher at $31.24.
In the outside markets, the NYMEX crude oil is $2.43 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 197 points.
One trader says, "We are up on continued bad weather in Russia FSU…Germany/Poland… too much rain in Ukraine…
The region of concern exports 50 million tons of feed grain/wheat and they have lost between 25 to 30mmt of production.. the fear is they may also put export controls on etc.. last night the Moscow forecasts had 95-105 for the next five days… so the problem is not over… dry in western Australia… its even dry in Mato Grosso… but its winter there… all raise concerns given the sharp reductions already incurred in the FSU."
The trader adds, "How long will the rally last? Most likely grains will sustain rally until Nov/Dec period when we will concentrate on new acreage potential and have handle on Indian exports and Australian crop. Corn is function of production reports. If they are light we rally through fall, rationing demand amidst not good enough yields. Remember, we need 90 million acres of corn a year to ensure ample carryout. Last year's acreage at 88 million was too small and harvested acres may be lighter than normal. Increasesing demand potential with Chinese imports, EU problems and increased ethanol mandates perhaps allowable blend, are all working to keep corn firm. If the USDA come out with less than 164-165 yield that trade is currently penciling, then corn goes higher. But, a 164 yield should really break this market," he says.
Mike
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At 10:13am:
"The grain markets continue to go as high as it's dry over domestic and foreign grain producing ports.This week has light rains over our eastern Corn Belt states of IL, IN, and OH where crop conditions are lowest nationaly. Total rain fall is .10 to .50 inches. The bigger news is high heat and lack of rain across the massive Russian grain prairies look to continue another week threatening wheat and small feed grain production. This lends more talk of eventual increases in U.S. exports to fill the hole in production," he says.
Mike
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At the open:
At the open, the Dec corn futures are 9 cents higher at $4.15 1/2. The Nov. soybean contract is 20 cents higher at $10.25. The Sep. wheat futures are 32 1/2 cents higher at $6.94 1/4.
In the outside markets, the NYMEX crude oil is $2.42 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 184 points.
Up, up and away!!
Mike
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At 7:13am:
A few talking points are being kicked around this morning. One, though the Russian Grain Union dropped 2010 production to 72 million metric tons vs. 78 mmt, according to the DowJones newswire. Wildfires are spreading in Russia. The gloomy picture is getting worse. If you don't believe that, watch this market today. Also, Iowa just recorded its wettest July on record. And August is starting out wet. There is suppose to be some intense heat this week. But, like one of those analysts that I talked to last week says, this is a weather market but not U.S. weather.
Mike
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At 6:45am:
Early calls: Corn up 7-9 cents, soybeans up 13-15 cents, and wheat up 22-24 cents.The market continues to build in this drought and the other EU countries' growing problems. Outside markets are all supportive for Monday.
Trackers:
Overnight grain=Trading sharply higher.
Crude oil=Trading $0.75 per barrel higher.
Dollar=Trading lower.
Wall Street= Seen opening higher as strong bank earnings are reported. Also, investors await comments from Fed Chairman Ben Bernanke and manufacturing data.
World Markets=Higher.
More in a minute,
Mike
