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Senior Contributor

From the floor December 28

At the close:

The March corn futures closed 8 cents higher at $6.23 1/4. The March soybean contract settled 2 1/2 cents higher at $13.87. The March wheat futures ended 18 cents higher at $7.98 1/4. The March soybean meal futures settled $2.30 higher per short ton at $372.60. The March soyoil futures settled $0.36 lower at $57.39.


In the outside markets, the NYMEX crude oil is $0.23 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 32 points.

 

Mike

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At mid-session:

The March corn futures are 7 cents higher at $6.22 1/4. The Jan. soybean contract is 6 1/4 cents higher at $13.79 1/4. The March wheat futures are 16 cents higher at $7.96 1/4. The March soybean meal futures are $1.60 higher per short ton at $371.90. The March soyoil futures are $0.03 at $57.78.
In the outside markets, the NYMEX crude oil is $0.23 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 6 points.


One trader says, "Well, weather in Argentina is part of the rally. We did some biz in wheat with Egypt and we have Iraq and Turkey with new tenders. So, we have a chance to do more, plus problems in China being talked about for wheat.  Farm selling seems shut off after some sales to pay the bills over the last few days. Basis in the country is steady to weak.  Ukraine and India extending export and stocks quotas, although india was for sugar.  So, not anything big to push this puppy higher, but nothing real negative out there at all when you are in a tight stocks scenario.  Pretty impressive day so far."

 

Mike

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At the open:

The March corn futures opened 3 1/2 cents higher at $6.18 1/4. The Jan. soybean contract opened 9 1/2 cents higher at $13.82 1/2. The March wheat futures are 9 3/4 cents higher at $7.90. The Jan. soybean meal futures opened $3.10 higher per short ton at $369.50. The Jan. soyoil futures opened steady at $57.75.


In the outside markets, the NYMEX crude oil is $0.07 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 3 points.


USDA announced Tuesday that Egypt bought 180,000 metric tons of U.S. and Argentine wheat.


Mike

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At 8am:

Just had a farmer call and say that he is able to sell 2011 soybeans, for November delivery, at $12.47. He's asking if he should pull the trigger on a portion of his crop. I said, I'm not an advisor but from the looks of the Argentine weather, I like the chances of this market rallying this week. Actually, what I told him was that I would put the question to the smart risk managers that I visit with on this forum everyday. So, how about a short poll, should he sell a portion of that crop or wait?


Mike

------

At 7:40am:

Correction: I mentioned last week that all trading sessions will hold normal hours this week. That is not exactly right. On Friday, the CME Group grain markets close at 12-Noon.


Mike

------

At 7:05am:

Tuesday morning's corn/soybean weather forecasts, for Argentina, call for above normal temperatures and below normal precipitation. Hot and dry is the theme for that South American country. The market used that weather mantra as fuel for a sharp rally in the soybean market. There seems to be no change in plans for today's session.


Mike

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At 6:55am:


Early calls: Corn 1-2 higher, soybeans 5-7 cents higher, and wheat 6-8 cents higher.


Trackers:

Overnight grain markets=Trading higher.

Crude Oil=$0.34 higher.

Dollar=Lower.

Wall Street=Seen opening slightly higher.

World Markets=Mixed, with Asia/Pacific lower and Europe stocks higher.


More in a minute,


Mike

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12 Replies
Contributor

Re: From the floor December 28


@marketeye wrote:

At 8am:

Just had a farmer call and say that he is able to sell 2011 soybeans, for November delivery, at $12.47. He's asking if he should pull the trigger on a portion of his crop. I said, I'm not an advisor but from the looks of the Argentine weather, I like the chances of this market rallying this week. Actually, what I told him was that I would put the question to the smart risk managers that I visit with on this forum everyday. So, how about a short poll, should he sell a portion of that crop or wait?

 

Mike

------

At 7:40am:

Correction: I mentioned last week that all trading sessions will hold normal hours this week. That is not exactly right. On Friday, the CME Group grain markets close at 12-Noon.

 

Mike

------

At 7:05am:

Tuesday morning's corn/soybean weather forecasts, for Argentina, call for above normal temperatures and below normal precipitation. Hot and dry is the theme for that South American country. The market used that weather mantra as fuel for a sharp rally in the soybean market. There seems to be no change in plans for today's session.

 

Mike

---------

At 6:55am:

 

Early calls: Corn 1-2 higher, soybeans 5-7 cents higher, and wheat 6-8 cents higher.


Trackers:

Overnight grain markets=Trading higher.

Crude Oil=$0.34 higher.

Dollar=Lower.

Wall Street=Seen opening slightly higher.

World Markets=Mixed, with Asia/Pacific lower and Europe stocks higher.


More in a minute,


Mike


I can't see any reason for a selling the market any time soon therefore I still have 2010 crop and nothing done for 2011.

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Senior Contributor

Re: From the floor December 28

We can book for over $13 now an I'm still holding out. Can book corn for 5.65 an I'm still holding there but close to locking some down. We are -.15 on Sept. corn. Beans are +.85 Aug. del, +.12 Sept.-Nov.
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Veteran Contributor

Re: From the floor December 28

I guess puts would not look to bad at least get a floor under some.I got a feeling there is going to be some wild rides this year.

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Veteran Contributor

Re: From the floor December 28

Depends on what a portion is and it depends what a guy is trying to achieve.  If your talking about a 5% sale what would  a 12.47 sale hurt I would think even if beans went up $2 it would be pretty easy to average the next 95%.  If you do something like %50 or more you probably have to watch the market until you know you have a crop.  If the market goes up $2 you will be pretty disapointed with yourself. 

 If you are trying to sell everything at the high there is a good probablity that today isn't it.  On the other hand its pretty typical to see the bean market drop $1 in about two trading sessions once the high is in.  So in reality you either have to sell on the way or on the way up or on the way down and most people including myself are terrible at selling on the way down because the is something in human nature that wants yesturdays higher price.  So my vote is why not sell a portion today, probably won't be the high but the only sure bet is that you won't hit the high.

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Veteran Contributor

Re: From the floor December 28

"Just had a farmer call and say that he is able to sell 2011 soybeans, for November delivery, at $12.47. He's asking if he should pull the trigger on a portion of his crop. I said, I'm not an advisor but from the looks of the Argentine weather, I like the chances of this market rallying this week. Actually, what I told him was that I would put the question to the smart risk managers that I visit with on this forum everyday. So, how about a short poll, should he sell a portion of that crop or wait?"

 

I heard the same question from a neighbor this morning. We just go off the phone. Told him I wasn't ready to pull the trigger yet but all the bullish consensus does scare me a little going into the January report. I also think the corn/bean multiplier leaves room for beans to rise a little more.  We usually see beans 2.4 times higher than corn and we are not quite there.

 

I'm targeting my next sales near 6.50 old corn and 14.00 beans.  (I'm only 10% sold on old crop.) I hope I'm not too optimistic. I haven't priced any new crop yet.

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Senior Contributor

Re: From the floor December 28

ag678,

 

You make some good points. It's a fairly significant amount. He says he's protected with insurance. He also feels comfortable selling a portion now and then averaging up, as the market heads higher. There is always that chance the market could run up another $2. But, maybe there is nothing wrong with scraping some profits off the table?

 

I am hearing that market gurus are telling farmer-customers to wait to sell, due to the uncertainty of input costs for 2011, 2012. So, maybe that is something to consider as well. I've heard production costs as high as $750 per acre next year. I scratch my head and think, "How can you make that work?"

 

Thanks,

 

Mike

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Veteran Advisor

Re: From the floor December 28

I don't understand how a person can say they are protected by crop insurance when the price is far from being established....although the price is attractive, it could be $1-2 less than the crop insurance floor price....and it could be higher as well.....

 

I also struggle to understand why a person would still be wide open on input costs.....

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Senior Contributor

Re: From the floor December 28

Ray,

 

Younger farmer still getting his risk management legs. You're right, he doesn't know his insurance rate. He just knows that he plans to protect part of his marketed crop with insurance. On inputs, I failed to mention he has those pretty well locked in.

 

Are you seeing a lot of farmer-selling? Are your driveways lined up with 18-wheelers? Of course, I realize just because they are delivering it now, doesn't mean they are selling it now, right? They could have already sold it or are just storing and waiting.

 

Mike

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Veteran Advisor

Re: From the floor December 28

Mike, I'm not sure what is happening in south central/southeast Iowa this marketing year will ever be a fair reflection of the midwest in general....a lot of guys went from 35% sold to 85%+ as the crop shrank and are being very cautious about metering out the last of the old crop corn....

 

We are dumping 400-450 trucks per day this week and could sure do without the rain later in the week that may turn to ice...

 

In our short crop situation, our battle plan will be to have more coverage in place sooner than normal......too much risk to staying naked into the middle/latter part of each month...

 

but I know my farming friends will be there to help me out---for a price!

 

Ray J

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