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Senior Contributor

From the floor December 27

At the close:

The March corn futures settled 1 1/4 cents higher at $6.15 1/4. The Jan. soybean contract closed 23 1/2 cents higher at $13.73. NOTE: July 2011 soybeans hit $13.97, as a daily high! The March wheat futures ended 2 3/4 cents lower at $7.80 1/4. The Jan. soybean meal futures closed $6.40 higher per short ton at $366.400. The Jan. soyoil futures closed $0.56 higher at $57.15.


In the outside markets, the NYMEX crude oil is $0.52 per barrel lower, the dollar is lower, and the Dow Jones Industrials are down 10 points.

 

Weather models call for 100-degree weather this week, for Argentina's soybean crop. What do you think about July 2011 soybean futures reaching just 3¢ away from $14.00? Wow!   The contract hit $13.97, at one point Monday.

 

Mike

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At 1pm:

 

Beans are up 24¢.

 

Mike

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At mid-session:

 

Soybeans are 14¢ higher, corn is 2¢ higher, and wheat down a few cents. Argentina's 'heat dome' seen as propping up bean and corn markets Monday.

 

Jim Bower, Bower Trading Inc., wrote to his customers Monday, "The bottom line for Argentina summer crops is suggestive of worsening crop stress and notable damage to some of the corn and sunseed producing areas in southern parts of the nation where dryness is already a problem. A full week of hot, dry, conditions while some corn is reproducing will seriously cut into production. Late corn, soybeans and sorghum might handle the weather situation a little better, but they too will eventually become stressed. Winter wheat maturation and harvest progress will likely advance favorably."


Mike

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At 8am:

China's Premier says that country has 200 million metric tons of grain reserves, according to a Dow Jones newswire story Monday. He says that wheat, rice, and corn supplies are "ample". Meanwhile, China's December soybean imports were estimated at 5.4 million metric tons, China grain officials report. January soybean imports are estimated to be 3.4 million metric tons.

 

Separately, China's grain market jumped Monday, ignoring the 'rate hike' news. Will the U.S. grain market ignore China's efforts to tighten its economy? What do you think?

 

And, there is market talk that Argentina's continued dry weather pattern will raise CME Group soybean prices this week. What say you? Help me out here. What's this week's market look like to you, slow or fairly active?

 

Mike

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At 7:35am:

 

Early calls: Corn 1-2 lower, soybeans 3-4 cents higher, and wheat 3-4 cents lower. See news about China below. This could  be the big market factor for Monday.



Trackers: Overnight grain markets=Traded mostly lower.

Crude Oil=$0.56 lower.

Dollar=Lower.

Wall Street=Seen falling as China announces a rate hike of its lending and deposits by .25%. This is seen as a clear sign China is trying to slow its economy.

World Markets=Lower.


More in a minute,


Mike

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14 Replies
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Veteran Contributor

Re: From the floor December 27

Number one factor in an extended rally is a crop that  is out of the producers hands.  That factor is in place with old crop corn and beans.  The last part of the big move in that rally could very well be in basis.  I really think beans could go to a buck or two over futures and corn maybe even set a all time high basis.    The market has to remain very nervous until mid June.    If it sees a crop in good conditions the premium will start to fade quickly in the new crop..basis will hold old a while longer, but the net result might still be down.  If the weather hurts the crop on August.....well, I think that is a terrible outcome..and I hope it never happens.

One thing that makes all markets hard to correctly guage, is the Fed's interest rate.  With no return on cash anywhere, more money gets forced in to commodities and equities.  Read that crude oil supplies in US are at two year highs...so why is crude up so much? 

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Senior Contributor

Re: From the floor December 27

Mike..... Seems to me that the Chinese said a few years ago that they had plenty of soybean reserves and would not need to import many beans......We all know how that worked out...... p-oed

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Visitor

Re: From the floor December 27

I think the market should be higher with tight supplies. I really hope for increase in ethanol demand in gas ( If it isn't done). I think if corn prices keep on continuing to climb,  farmers who haven't plant in years will be bringing out there planters to plant a couple 50 acres. Grain Trade Issue need to be answer and resolved. One last thing if every producer could get a good act out of mother nature throughout the growing season then Grain prices right now would fall cause plants are getting the right needs to yield. The supplies are

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Visitor

Re: From the floor December 27

   Everybody says that china raising the interest rates will slow their import business. I look at it as if US would raise their rates then the dollar would go up in turn slow our exports. So if china raises rates then their yen would go up and would benefit them to import more  ?????

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Senior Contributor

Re: From the floor December 27

Traders and analysts keep saying China still needs to buy U.S./SA beans. Plus, in February, China is seen buying U.S. corn. I've mentioned before, one trader told me that he follows 28 markets and China seems to be saying one thing and doing another in nearly all of those markets.

 

Mike

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Senior Contributor

Re: From the floor December 27

China is raising rates to slow its economy. Plus, by raising rates, this attracts more foreign money to be put into China banks, in an attempt to capture that higher interest rate return. The caution the Chinese have is raising rates too fast, creating domestic oversupply. But, as long as the yuan remains lower than the Dollar, China can keep exporting products cheaper than a lot of countries, namely the U.S., and beat us, on price, on the global market.

 

Mike

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Senior Contributor

Re: From the floor December 27

China DOES need to buy US soy. And everyone else's. The pattern is clear. There should be absolutely no doubt on the score of soybeans and China. This is a straight forward policy decision dictated by China's domestic agricultural situation.

 

Simply put, China does not have enough water to produce it's own need for soy and all other commodities it grows.

 

Exactly how this becomes an item filled with intrigue escapes me. China needs and China will buy. The IMPORTANT question is how it impacts US producers decisions and markets.

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Contributor

Re: From the floor December 27

beeing in argentina as a farmer and suffering the weather here i can say that the market is making a mistake today : the weather will hit the corn, that´s for sure but not the soybeans at this point......nearly 50% of the corn is now in the middle-ending their critical period and i can say 0% of the soybeans are on their critical period today......so i was expecting to see more increase in corn than in beans...at least from the weather point of view

 

if the market is thinking that this dry can continue, well that´s another reason but the REAL fact today is that corn is suffering a lot, the damage is really done!

 

my doubt is that maybe the corn was going up to much inthe last week and have no more space to the upper side????

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Senior Contributor

Re: From the floor December 27

Santiago,

 

Great to hear from a farmer on the ground in Argentina. So, you are saying the corn crop is suffering more than the soybeans? The market reacting to dry soy weather, might be a way the trade shows what it really thinks. And that is it believes the U.S. corn crop remains the most important. But, the Argentine and Brazil soybean crop carries more weight. And, keep in mind that the traders always tell me that the market trades fear not fact. So, just the fear that the Argentine soybean crop could get hurt by hot/dry weather supports Chicago prices.

 

Separately, can you let us know a little more about your crop? What stage is your soybean crop in? Is it knee high, hip high, or what? Better yet, can you post a picture of one of your fields?

 

Thanks for checking in Santiago.

 

Mike

 

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