From the floor December 10

[marketeye]

At the close:

The March corn futures settled unchanged at $5.74 1/2. The Jan. soybean contract closed 8 1/2 cents lower at $12.82 1/2. The March wheat futures settled 13 cents lower at $7.75 1/2. January soybean meal futures ended $4.30 per short ton lower at $336.40. The Jan. soyoil futures contract settled $0.04 higher at $54.19.

In the outside markets, the NYMEX crude oil is $0.65 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 26 points.

Market wrap: "An interesting market today," one grain analyst says. "I think soybeans got caught in 'buy the rumor and sell the fact' trading and also the talk that China would increase interest rates today. The S-D report estimate was supportive but expected. So, when there was not any other news for beans, selling and profit taking showed up.  Corn acted great considering that USDA did the market no favors.  But, people anticipate higher demand from the ethanol crowd and also Argentina should be entering into the reproductive phase of its production cycle. So, it (corn market) got support anyway.  USDA cut use for wheat, I guess on better milling yields. Ending stocks also ticked up in the world estimates.  That meant wheat had nowhere to go and as strong as it has been lately, it was probably time to see this market move a bit lower as well.  But, weather is still the big issue here.  I think we will be back to weather and demand next week, and I also think down side is limited for now, due to these factors.  I am looking at the charts now, but I doubt any serious damage was done to trends."

Mike

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At mid-day:

The March corn futures are 1 3/4 cents lower at $5.72 1/2. The Jan. soybean contract is 4 cents lower at $12.77 1/2. The March wheat futures are unchanged at $7.88 1/2. January soybean meal futures are trading $4.30 per short ton lower at $336.40. The Jan. soyoil futures contract is $0.49 higher at $54.64.

In the outside markets, the NYMEX crude oil is $0.89 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 18 points.

Still litte change from the open.

Mike

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At 10am:

The markets remain slightly lower. Well, what do you think? Can the weight of the USDA Report remain on the markets all session? Are you surprised the favorable ethanol tax credit news hasn't helped this corn market?

Mike

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At the open:

The March corn futures opened 4 1/2 cents lower at $5.69 3/4. The Jan. soybean contract opened 5 cents lower at $12.76 1/2. The March wheat futures opened 9 1/2 cents lower at $7.79. January soybean mela futures are trading $1.50 per short ton lower. The Jan. soyoil futures contract opened $0.30 higher.

In the outside markets, the NYMEX crude oil is $0.63 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 4 points.

Mike

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At 9am:

USDA announced Friday that an 'unknown' buyer bought 56,000 metric tons of U.S. soyoil.

UPDATE: One trader says Early Calls: Corn seen opening unchanged-to-down 3 cents, beans and wheat up 2-5.

Mike

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At 8:45am:

As we get closer to the open, it's important to note that the Early Calls remain lower. But, they could change.

Here's another analyst's reaction to this morning's USDA Report:

"The December report is typically a yawner and it appears this one is no different.  I would view the report overall as slightly bearish to corn and wheat and neutral to soybeans.  The USDA elected not to make any major shift in corn or wheat usage.  There is a lot of wheat in the world but not a lot of good quality high protein wheat, which the U.S. has.  I would suspect end users will take advantage of any prices decline to secure more high pro wheat.  The market will now shift attention to Argentina.  It is important for the ethanol blenders credit to pass which will keep domestic usage strong.  Our calls are: Corn 3 to 5 lower, beans mixed, and wheat 3 to 5 lower.

Mike

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 At 7:45am:

Report Reaction:

One CME Group floor trader says:

No big surprises, regarding the USDA report. Corn seen opening unchanged-to-down 3 cents, beans and wheat up 2-5. USDA punted this month. Positive news for ethanol could keep corn from 
breaking hard."

--

One trader/analyst says:
"Kind of an interesting report. Calls will be a little lower in corn and wheat, maybe 3 to 5 lower for both and steady/mixed in the beans.  Corn uptick in imports is very possible, I hear of a lot of Canadian corn moving into NY for the dairy and stuff there.  Wheat cut in food demand I don't understand real well, but OK.  Soybeans increase in export demand and cut in ending stocks dead on expectations.  World ending stocks appear, at first blush, to be a little negative as well.  So we could see a little pressure here early in the day anyway."
--
Yet another analyst says: "Nothing beyond expectations...AP last night suggested tax extender package was going to go through for ethanol...Early Calls are firm with soy carryout down -20.....market leery of chasing strength into last half of the session... as trade worried about possible interest rate hike in China this weekend. He adds, "This is a small report...USDA never updates production in Dec. Remember, final yields are still expected lower and they will come in January. Also, a Jan stocks report that will be important, with many thinking there will be more disappearance there. Notice the July Dec corn spread continues to rally."

Forget a call off the report...…"

--

One floor trader says: "The most boring report in ages. The increase in world wheat may be looked at as bearish but we are dealing with quality issues, not quantity.
Beans are doing nothing, based on this report, with all eyes on Chinese IR levels.
Corn is a do nothing with the front end of volatility exopected to get killed."

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One analyst says: "Neutral to bearish, as corn and wheat came in over pre-report trade guesses on ending stocks. World wheat and corn stocks are higher. The numbers were not too far off guesses. So, it was a little bit conservative of a report. No big surprises."

Mike

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At 7:33am:

USDA says U.S. Carryover for:

Corn=832   million bushels  vs. 827 in Nov.

Soybeans= 165  million bushels vs. 185  in Nov.

Wheat=  858    million bushels vs. 848 in Nov.

Mike

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At 7:20am:

A few things, before the numbers come out. I'm told the market, following the digestion of the report,  could go back to trading South America weather. Though SA farmers are getting needed rain this week, hot/dry is in the forecast for next week. Plus, China has raised its bank reserve levels, for the third time in a month. That country continues to try and cool its economy.

Mike

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At 6:30am:

Early calls: Will be subject to this morning's USDA December Supply/Demand Report at 7:30am CST. We will have the numbers and reaction for you. Overnight, corn traded 4 cents higher, soybeans 5 1/4 higher and wheat up 7 3/4 cents. Plus, the outside markets are favorable, this morning.

Trackers:

Overnight grain markets=Trading higher.

Crude Oil=$0.49 higher.

Dollar=Lower.

Wall Street=Seen trading higher, as traders eye international economic news expected to release today.

World  Markets=Asia was lower, Europe stocks finished higher Friday.

More in a minute,

Mike

[Mike M2692830]

Any pre open reaction to the numbers. Are they in line with previous thinking. Beans seem to have a number worth noting. Unless the surprise to this report is that there is no surprise. thanks for the info Mike.....MikeM

[SouthWestOhio]

At first glance I'm glad there are no big bearish surprises in the USDA report.  Somebody must have gotten their hand slapped after the September report. 🙂

With the early harvest in most parts I'm thinking these may be close to the final numbers we see in January for yeilds since they have already had plenty of time to analyze harvest reports.  The only question going forward is how these prices are effecting demand.

[marketeye]

The trader and analysts are saying to watch out for the January report, not this one. I won't repeat what they say, but you can see the comments above.

MIke

[jec22]

Anyone have an answer for the decoupling in gold and copper?  Gold losing ground while copper is setting record highs. 

[SouthWestOhio]

jec I think I saw something about tight copper inventories.  That may explain the difference.

[istDS]

Among the things I find curious.

From the notes.  It seems in the US millers have been able to get more flour from a bushel of Wheat year over year the last couple of years.

It doesn't look like the USDA takes too much time working with the Chinese numbers.  It looks to me like we must print the numbers China gives us.  

Just looking at the Chinese numbers I'm confused.  Reads like they should be better off this year than last.  Printed expected Begging stocks almost the same for 10/11 as 9/10.  Coarse grain imports actually going down from 9/10 to 10/11.  What's with the runaway domestic Chinese grain markets.

Looking at the wheat numbers.  The numbers from Australia, Canada and Pakistan just jump out at me.  Are we shipping fertilizer along with military aid to Pakistan.  I thought Pakistan was underwater last spring.  I thought I was saddened by the flooding their this year.  Pakistan seems to be able to do better year over year than it's neighbors.

made format edit

[Palouser]

For wheat I'm guessing info trickling in over the next week or two may be a boost to prices. There are few sources of possible good news for wheat production. There are several areas where wheat can cause more insecurity - mainly the Middle East and Argentina. Good weather in Argentina (rain) would at least put a finger in the dike for more quality wheat. Deterioration would have consequences larger than the Argentine wheat crop usually justifies. Continued deterioration in North Africa, Syria and Turkey will determine how much bigger than expected imports will be for the region.

In other words, this report isn't too important to the future of wheat IMO.

[nwobcw]

China is using copper at a furious pace updating and expanding their electrical grid.  I read where they are expected to use 10% of the present known reserves of the worlds copper.

[jec22]

nw, So is it wrong to conclude that copper represents industry growth, and gold represents betting on economic unstablity?  If $4 copper hasn't slowed down China, why would $14 soybeans?