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marketeye
Veteran Advisor

From the floor February 28

At 2:40pm:

The other day, someone on this site asked about Brazil's soybean harvest. Here is the latest. As of February 25, Brazil has harvested 19% of its crop, below 26% a year ago, and above an average of 15%. 

 

Mike

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At the close:

The May corn futures closed 9 cents higher at $7.31. The May soybean contract settled 10 3/4 cents lower at $13.64 3/4.  The May wheat futures ended 5 3/4 cents higher at $8.17. The May soymeal futures settled $2.80 per short ton lower at $361.90. The May soyoil futures closed $0.25 lower at $57.33


In the outside markets, the NYMEX crude oil is $0.67 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 67 points.

 

Mike

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At mid-session:

The May corn futures are 4 cents higher at $7.26. The May soybean contract is 9 cents lower at $13.66.  The May wheat futures are 2 1/4 cents lower at $8.09. The May soymeal futures are $3.10 per short ton lower at $361.60. The May soyoil futures are $0.38 lower at $57.20


In the outside markets, the NYMEX crude oil is $0.30 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 83 points.

 

The traders I talk to are really really bullish. The bottomline, North America just can't grow enough of everything to satisfy the demand. Som real price explosions are possible, with acreage shortage, inclement weather, etc.

 

Mike

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At 10:15am:

The floor is quiet. Corn is 3 cents lower, soybeans 13 cents lower and wheat 7 lower. While it's slow, I asked a trader to share his thoughts on price direction. You might find this interesting.

 

He says, "The situation with the corn market is two-fold, one trader says. We shook the trees regarding the rebalancing and got some 'long' positions out of the market. And then we realized there was going to be  a tight ending stocks squeeze in corn. In order to achieve our goal of 165 bu./acre yield and 92.0 million acres, this year, we need a perfect growing season. First off, that is dreamy. The government's outlook is that demand is going to remain strong. We're not slowing down ethanol or any other aspect of demand. So, in February if you tell me we are going to have a perfect summer and reach 165 and 92, I'm not going to believe you.

So, now these guys that got out of the market, have gotten back in and up we go. We still have a dynamic corn market, in my opinion. If we have the slightest hiccup in weather, you're looking at $9 corn. If you have a major hiccup in weather, you're looking at $12 corn.

As far as rationing, I haven't seen any slowdown anywhere. So, we don't know what price level sparks rationing. Ethanol numbers are off the wall each week, right?

If all goes right, corn is the leader. But, soybeans are the most dynamic for this market, due to a 160 million carryout. Soybeans could lose acres, because right now there's a $150 dollar profit advantage for the farmer, if he/she plants corn over soybeans. What are you going to plant, with that ratio? Corn. So, if we have any bad weather for the soybean market and China's demand stays anywhere close to where it's been, you're looking at $20 soybeans."

 

What say you about the trader's perspective on prices?

 

Thanks,

 

Mike

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At the open:

The May corn futures opened 1 cent lower at $7.21. The May soybean contract opened 7 cents lower at $13.68.  The May wheat futures opened 3 3/4 cents lower at $8.07 1/2. The May soymeal futures opened $1.20 per short ton lower at $363.50. The May soyoil futures opened $0.53 lower at $57.10


In the outside markets, the NYMEX crude oil is $0.60 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 105 points.

 

Mike

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At 8:15am:

U.S. Planting Update: One Louisiana crop consultant says, "Corn is being planted in Louisiana as far north as the Arkansas border.  We have heard of some farmers who may even be through with their corn planting for this year."

He also reports that some soybean varieties are in short supply, in the South.

 

Mike

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At 6:45am:


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


Trackers:

Overnight grain markets=Trading lower.

Crude Oil=$0.38 higher.

Dollar=Lower.

Wall Street=Seen opening mixed as investors study the direction of the world's unrest. Also, Monday, the U.S. personal spending and personal income data will be released. For the first time in a week, oil is flowing in Libya. This sends a calming signal to the crude oil market. Peraonally, I bought gas for $3.55 per gallon in the Chicago area, this past weekend. It was depressing.

World Markets=Higher.

 

More in a minute,

 

Mike

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5 Replies
Canuck_2
Senior Contributor

Re: From the floor February 28

Don't feel bad about your gas price.

I think your $3.55 is $0.94/litre

Price around here is $1.20/litre and that is CAN$, add 2% to buy it in US$ = $1.225. About 30% higher?

Come on up north where we have enough oil to be the US's biggest supplier of crude.

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marketeye
Veteran Advisor

Re: From the floor February 28

I would come up there Canuck_2, but I can't afford the gasoline.

 

This morning, I'm reading that the index that measures U.S. trucking tonnage is rising to its highest level in three years. Two things to pull from this. First, this is some indication that the economy is picking up, experts say. However, with diesel prices shooting higher, you wonder how long this higher trucking index can go. For farmers, we're entering a time that diesel use goes way up (planting season). Though it's quiet today, the world's unrest seems along way off in settling itself and oil is right in the bulls eye of this storm. I've also heard that regarding the geopolitical fighting, the type of oil used to make diesel is threatened even more-so than other types of crude oil. What have you heard about that?

 

How does this all impact grain prices and your marketing plan? Well, indirectly it could. Until the March Planting Intentions Report, it seems the market will want to see if this world uprising gets solved. For a short-time here, outside markets may trump other grain market factors. Unless China keeps buying soybeans and perhaps corn, which they could.

 

Just some thoughts,

 

Mike

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SouthWestOhio
Senior Contributor

Re: From the floor February 28

A comment I read mentions corn seed is in short supply in La. If any of those early plantings get impacted by weather and need replant they will have a tough time locating decent seed.

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jcf97
Frequent Contributor

Re: From the floor February 28

I agree with that trader you spoke to.  USDA is expecting a lot of things to go perfect in order to get enough acres in the spring and an average yield up to 165bpa.  Were they trying to temper the markets or do you think they just added fuel to the fire?

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marketeye
Veteran Advisor

Re: From the floor February 28

Not just fuel, jet fuel.

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