From the floor December 9

[marketeye]

After the close:

Up next, the USDA December Supply/Demand Report at 7:30am CST, Friday. We'll have full coverage for you right here.

By the way, late this afternoon it was reported that the ethanol tax credit may get included in the Obama tax cut extension plan. One source tells Agriculture.com, "Iowa Senators Harkin and Grassley were fighting for flexible fuel vehicles and blender pumps today, if the tax credit is lowered to 36 cents and that Jon Kyle (lead negotiator for McConnell) wouldn’t go along with it. So, Grassley and Harkin insist on keeping the level at 45 cents. There are some reasons why the White House wouldn’t sign off on FFVs, but those reasons were not explained. Long term, more support for FFVs would have been a better deal since this extension, I’m told, is only for 2011. I think the ethanol industry will have less clout next year to push for FFVs, etc., and they may not get another tax credit."

Perhaps this news trumps the USDA report Friday? We'll see.

At the close:

The March corn futures settled 1/2 of a cent lower at $5.74 1/2. The Jan. soybean contract closed 16 3/4 cents lower at $12.79 1/4. The March wheat futures settled 4 1/2 cents higher at $7.88 1/2. The January soybean meal futures closed $7.60 per short ton lower at $339.50. The January soyoil closed $0.30 lower at $54.15.

In the outside markets, the NYMEX crude oil is $0.09 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 33 points.

Mike

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At mid-session:

The March corn futures are 1/2 of a cent lower at $5.74. The Jan. soybean contract is 5 cents lower at $12.91. The March wheat futures are 1 1/2 cents lower at $7.82. The January soybean meal futures are trading $3.30 per short ton lower at $343.80. The January soyoil is $0.21 higher at $54.40.

In the outside markets, the NYMEX crude oil is $0.04 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 28 points.

One analyst is saying, "Well, a very slow session, so far today. It seems, almost, as if the market has gone into a 'holiday' mode already. But, I think a lot of it has to do with the supply and demand estimates to be released in the morning. Just real quiet with no one doing too much.  People expect a bullish report tomorrow. But, I wonder if they need to wait until next month.  All I know is that it is very hard to get people interested in doing something until tomorrow, right now. So, people are holding back.  I think pressure on the beans is coming from the CONAB and ABIOVE production estimates showing that Brazil will produce.  I expected high numbers from both as the rains in Brazil seem timely now, after a late start.  Corn is holding better on CONAB lower production estimates for corn.  Wheat should be better, period.  The export news overnight favored corn and wheat more than the beans, but were nothing much either way." 

Mike

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At the open:

The March corn futures opened 3 cents lower at $5.71 1/2. The Jan. soybean contract opened 5 1/2 cents lower at $12.90 1/2. The March wheat futures opened 1 cent lower at $7.83.

In the outside markets, the NYMEX crude oil is $0.32 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 2 points.

Positioning ahead of tomorrow's USDA Dec. Supply/Demand report is pressuring the grain prices. Also, profit-taking is pushing the CME Group markets lower, as is unfavorable outside markets, traders say.

Mike

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At 7:35am:

The USDA released market-friendly Weekly Export Sales Thursday.

For corn, sales were estimated at 807,500 metric tons vs. the trade expectations of 600-1.0 million. For soybeans, the sales were 870,800 metric tons, in-line with the trade's expectation of 700-1.0 million mt. For wheat, USDA says weekly sales were 726,600 metric tons, above the trade's estimate of 400-650,00 mt. Soymeal sales came in at 193,400  metric tons, on the low end of the trade estimates of 125-200,000 mt. 

Mike

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At 7:20am:

Iraq has bought 250,000 metric tons of U.S. wheat for 2011 delivery.

Separately, Brazil is expected to get wide-spread rains today.

Meanwhile, copper prices are hitting record-highs today, as investors cling to the commodity. Silver hit 30-year highs this week, and gold hit record-highs, as well.

And does this surprise you? A China Cabinet official is saying that countries' long-term grain self-sufficiency is in question. 40 million more hectares would be needed, and China doesn't have it.

Mike

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At 6:45am:

Early calls: Corn down 1-2 cents, soybeans 1-3 lower and wheat up 3-5 cents. Weekly Export Sales will be released at 7:30am CST.

Trackers:

Overnight grain markets=Trading mostly lower.

Crude Oil=$0.12 higher.

Dollar=Higher.

Wall Street=Seen trading higher, as Obama's extende tax cut idea moves forward. Also, global stock gains supports Thursday's U.S. stock market.

World  Markets=Mostly higher.

More in a minute,

Mike