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Senior Contributor

From the floor February 1

At 2:15pm:

Here it comes: I'm on the 14th floor of a building in downtown Chicago. Out of my window, I'm now seeing bigger snowflakes. Will we get 20-inches, like they are calling for, I'm not sure. Trucks with sand are now traveling up and down Michigan Ave. Plus, my wife just called, from the grocery store, and swears the food prices are going up by the minute. The store parking lot was so full she had to circle the block a few times before any spot came open. If we get the worst snowstorm since 1967, I'll show you that. But, here is what downtown Chicago looks like now:

 

Chicago snowstorm

 

The haziness is the snow. As you can see, the flags are standing straight out, but the winds are not 60-mph, like we're suppose to have. I'm not sure how his might impact the overnight's, perhaps not at all.

 

Mike

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At the close:

The March corn futures settled 6 1/2 cents higher at $6.66. The March soybean contract closed 27 cents higher at $14.40.  The March wheat futures ended 5 1/2 cents higher at $8.35 1/4. March soybean meal futures settled $8.10 higher per short ton at $388.40. The March soyoil futures closed $0.84 higher at $58.72.


In the outside markets, the NYMEX crude oil is $1.42 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 142 points.

 

One analyst says, "The big snowstorm, now hitting the US Midwest, could be a double-edged sword. The states that get the bulk of the snow see a blanket protection for its wheat, as well as eventual needed moisture from the meltdown. But, some forecasts suggest the snows will miss up to 30% or more of the wheat that then will get hit with sub freezing temperatures and ice late  in the system. This could support wheat prices late week."

 

Wheat Options Talk: One trader says, "In the wheat options pit, CSO's entered the order flow Tuesday for the first time. These are options on the underlying futures spreads, with strike prices based upon the likelihoood, or lack thereof, that the futures spreads will widen or contract to levels signified in one-cent intervals that reflect current and possible spread prices between various contract months in the wheat.  Up until Tuesday, the wheat options had not particpated as much in this relatively new product (it was introduced last summer) as the corn and the bean options.  But all that changed, as two large players spent the day sparring back and forth on the (July/Sep. -30 cent CSO).  This out-of-tthe-money option is based upon the notion that the spread between the July and Sept. futures will or will not trade as much as 30 cents.  The actual spread traded on Tuesday from 181/2 to 20 1/2."


Mike

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At 11:50am:

USDA Export Inspections Report shows friendly but not bullish numbers. Remember, this is a preview to Thursday's Export Sales report.


The weekly export inspection report put wheat inspected for near term export at 21.3 million bushels versus the four-week average of 19.7. "Certainly not a bullish signal but at best a friendly demand number leaving the potentially bullish psychology for larger demand to surface sitting out there," one analyst says. Bean inspections were 29.6 million bushels versus 43.1 the week prior and four-week average of 35. Corn inspections were 18.6 million bushels versus 26.5 the week prior and four-week average of 20. Corn and beans fall prey to the onset of the week long Asian lunar new year holiday beginning Wednesday, the analyst says.

 

Mike

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At mid-session:

The March corn futures are 4 cents higher at $6.63 1/2. The March soybean contract is 14 cents higher at $14.27.  The March wheat futures are 2 3/4 cents lower at $8.38. March soybean meal futures are $4.40 higher per short ton at $384.70. The March soyoil futures are $0.38 higher at $58.28.


In the outside markets, the NYMEX crude oil is $0.79 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 107 points.

 

Mike

------------

At the open:

The March corn futures are 3 3/4 cents higher at $6.62 1/2. The March soybean contract opened 9 1/2 cents higher at $14.22 1/2.  The March wheat futures opened 1/2 of a cent lower at $8.40 1/4. March soybean meal futures opened $3.00 higher per short ton at $383.40. The March soyoil futures opened higher.


In the outside markets, the NYMEX crude oil is $0.35 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 85 points.

 

Mike

-----------

At 8:05am:

USDA announces Tuesday:

--120,000 metric tons of U.S. corn was sold to 'unknown' for 2010-11 delivery.

--110,000 mt of U.S. soybeans were sold to 'unknown' for 2010-11.

--20,000 metric tons of U.S. soy oil sold to China for 2010-11 delivery.

 

The 2010/2011 marketing year for corn and soybeans began September 1; soybean oil began October 1.

 

What do you think, is that 'unknown' corn buyer China?

 

Mike

---------

At 8am:

There is a lot of news coming out of China, this morning. Dow Jones Newswire headlines below:

 

--Despite weaker crush margins, China's demand for U.S. soybeans remains strong.

--China sees the need to maintain 95% self-sustainability in rice, corn, and wheat.

--An earthquake hit Taiwan this morning.

--Japan is seeking 183,640 mt of food wheat for March, April delivery.

--Egypt's ports are open. Also, new Trade Minister sees little change in Egypt's import policy.

Mike

------------

--At 6:30am:


Early calls: Corn down 1-2 cents, soybeans 2-4 cents higher and wheat 1-2 cents lower.


Trackers:

Overnight grain markets=Trading mostly lower.

Crude Oil=$0.75 lower.

Dollar=Lower.

Wall Street=Seen opening higher as investors focus more on corporate earnings and place Egypts uprisings on the back burner.

World Markets=Higher.

 

 

More in a minute,

 

Mike

 

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17 Replies
Senior Contributor

Re: From the floor February 1

Thanks Mike, you are the first this morning.

10, Light snow, 30 mph wind gusts. roads all snow packed travel not recommended,  and more coming!

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Veteran Contributor

Re: From the floor February 1

Call me stupid, like standing in front of an oncoming train.  BUT, the uprising in Eqypt has NOT disrupted any crude supplies, no matter how much the media is hyping that possibility.  Also overhyped, is the possibility that the Muslim Brotherhood will rule Eqypt.  I actually agree that the US needs to stay out of this in Eqypt.  Pretty impressive when the citizens of Eqypt starting protecting the buildings from the looters themselves and making their own checkpoints for travel. Things there today are more of a celebrating mood instead of a violent one.  Crude should be set for a pullback.  Nothing causes higher food prices than crude.  For many in this world, food represents 30-40% of their living costs.  Here in the US the consumer is spoiled and it is a small percent of total living costs(depending on income). 

I think I have this figured out now.  We need cheap food, so that people can buy more I Pads,so that Apple can break last quarter's revenue of 6 billion. All the media loves Apple for making 6 billion in a quarter.  But, whoa, don't let a farmer make a decent return on an investment in the millions.  Though, sometimes I wonder if we won't look back at the days of two dollar corn with fondness.  Big money brings some real ugliness with it.  Quess you can call me stupid and crazy, I really don't want alot of the things that come with higher prices for grains.  But, you play the hand you are dealt.  I am just thinking one could draw two aces and two eights....and lose.

 

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Senior Contributor

Re: From the floor February 1

So, you don't see much farmer-selling today? What do you think they are doing at the local elevator, playing cards?

 

Mike

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Veteran Contributor

Re: From the floor February 1

Farmers don't have much left to sell.  The point I was trying to address,  was that crude does not have the fundamentals that grains do for the recent uptick. 

The card analogy was probably a poor choice...two aces and two eights is considered the 'deadman's hand'.  

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Contributor

Re: From the floor February 1

Kinda doubt it, but maybe.

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Senior Contributor

Re: From the floor February 1

No, Not much country movement today. Can you imagine trying to roll up a frozen and snow covered tarp on the grain trailer? And empty, those aluminum trailers tend to slide all over the ice.

Besides, wouldn't want anyone slipping on the ice and falling underneath or into something.

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Senior Contributor

Re: From the floor February 1

Mike.....IMO..... China will not buy US corn until they have cleaned out the Aussie wheat supply OR the US prices collapse because we have some how found more bu OR some how find more acres...... US sales to China will not happen until all other sources are used up........ Of course...... I could be wrong......:~).....p-oed

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Senior Advisor

Re: From the floor February 1

Was in Rapid City over the weekend---although we stayed out of Deadwood---good point jec !

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Senior Contributor

Re: From the floor February 1

Sou Tx, Good to see you stop into the talk cafe. Are you saying you don't think today's corn sale was to China?

 

We appreciate your participation. More corn or cotton to be planted in Texas this year? What are you hearing?

 

Mike

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