From the floor January 12 (Report Day)

[marketeye]

At the close:

The March corn futures settled 24 cents higher at $6.31. The March soybean contract closed 58 cents higher at $14.15. The March wheat futures ended 11 cents higher at $7.70 1/2. The March soybean meal futures settled $18.60 higher per short ton at $381.50. The March soyoil futures closed $1.37 higher at $57.98.

In the outside markets, the NYMEX crude oil is $0.70 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 94 points.

So, one trader says the funds did sell-off the market, at the close. The funds will be active again tomorrow, rebalancing their portfolios, and then be done. So, one more day of the funds throwing their weight around.

The index funds did sell the market, at the end of the trade session. But, funds, in general, bought 20,000 corn contracts, 10,000 soybean contracts, 3,000-4,000 wheat, and 4,000 soymeal and soyoil futures contracts.

To be clear, the index funds and the trend-following funds are different groups.

Mike

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At 1:17pm:

No limit-up pricing, in the final minutes. In fact, the markets dropped a little bit. So, selling, not buying at the close. Settlement prices are coming up!

Mike

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At 1:00pm:

As we head to the final minutes of today's sharply higher trade-session, corn and soybeans are just a few ticks from their daily limit-up prices. Wheat is up 13¢. So, it looks like there is a real possibility of finishing limit-up on some contracts. We'll see. The floor is getting louder. Oh, by the way, I'm going deaf from listenting to all of those soybean option traders today. I mean to tell you, that pit has not been quiet once. These guys are really getting after it.

And this just in: On top of all of their current drought problems, the Argentina farmers have announced they will stage a strike, for a week, to protest against export controls, according to a Dow Jones Newswire story. Wow!

Mike

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At mid-session:

The March corn futures are 25 1/2 cents higher at $6.32 1/2. The March soybean contract is 58 1/2 cents higher at $14.15 1/2. The March wheat futures are 17 cents higher at $7.76 1/2. The March soybean meal futures are $17.80 higher per short ton at $380.70. The March soyoil futures are $1.54 higher at $58.15.

In the outside markets, the NYMEX crude oil is $0.75 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 109 points.

After hitting limit-up price-points in the corn and soybean markets, and marking 30-month highs, the prices have backed off slightly. Overall, prices remain very strong with plenty of support coming from the USDA Crop, Supply/Demand Reports Wednesday.

Mike

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At 10am:

The March corn contract has come off the limit up mark and is trading again. One trader sees the corn market will break a bit on the close. The sellers won't let the buyers get away with this rally all day. We'll stay strong, but a break could happen at the close."

Mike

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LIMIT UP:

30-month highs for corn and soybeans. March corn contract hits its daily trading limit of 30¢. Soybeans hit a 70¢ limit up price as well. Meanwhile, wheat is 28¢ higher, its limit is 60¢.

The floor is very loud. Traders in the soybean options pit are going nuts. Call and put option prices are really really high!

Mike

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At the open:

The March corn futures are 24 cents higher at $6.32. The March soybean contract opened 51 cents higher at $14.08. The March wheat futures opened 30 1/2 cents higher at $7.90. The March soybean meal futures opened $17.00 higher per short ton at $380.00. The March soyoil futures opened $0.21 higher at $58.75.

In the outside markets, the NYMEX crude oil is $0.64 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 87 points.

Mike

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At 8:45am:

Dan Basse, Ag Resource, just told reporters of a CME Group briefing that soybean prices could hit anywhere between $14.50-$15.50, and corn has another $0.80 to go higher, or $6.20-$6.80. Overall, the analysts say demand rationing needs to kick in, starting with ethanol.

They also said an additional 11.0 million major crop acres are needed this spring in the U.S. And, in the world, another 26.0 million acres are needed to meet world demand. And that number is hard to reach with a lot of countries unable to supply those acres.

Mike

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At 7:30am:

USDA says:

Corn Production=12.447

Soybean Production=3.329

All Wheat Seedings=41.0 million

Corn Ending Stocks=745 million

Soybean Ending Stocks=140 million

Argentine Corn Production=23.5 million metric tons

Argentine Soybean Prod.=50.5 million metric tons

Early Calls: Corn 7-10 cents higher, soybeans up 15-20 cents , wheat not sure yet.   

Mike

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REPORT REACTION:

One trader says, "My simple reaction is to parrot what I heard from Tom Grisafi, president of Indiana Grain Co.; with stocks this tight, prices will rise to a level that will put the consumers (ethanol and livestock) out of business. We need to take users out of the equation to get stocks to a more manageable level over the next year or two."

Yet another trader says it is a normal trading day, despite the USDA Report being friendly.

One analyst says, "Corn and beans saw production and carry over stocks come in under the pre-report trade estimates, setting us up for a higher opening. There were no shocking numbers, but the trade should be surprised to some point. Ethanol, seed and industrial use, all higher for corn with exports unchanged.With beans the lower ending stocks mainly came off lower production. It's not how the market opens on report day, but how it closes, that tells you what funds will do near term."

Yet another analyst says, "No shocks at first glance this morning, but there is really nothing negative here as well.  Only Wheat seedings could be construed as potentially a little bearish I suppose.  But not really.  Stocks and production and ending stocks estimates all at the lower end or below trade estimates.  We were strong overnight and the dollar is lower so we should be able to at least maintain the overnight gains and possible move higher.  We could be 20 higher in the beans or maybe more, maybe 8-10 higher corn, maybe 23-15 higher wheat."

Yet a trader says, "Bullish report but nothing dramatic. The USDA hedged bets again by leaving corn exports flat and lowering feed. My question is, if you lower feed in wheay and corn what do the dam animals eat? "

An ethanol industry spokesman tells me, "The ethanol demand number implies production of more than 13.4 billion
gallons during the 2010/11 marketing year, which is generally in line
with our expectations. The increase in USDA's ethanol grind number was
not surprising in light of record ethanol output in December and strong
production in November. However, we think moving much beyond 4.9 billion
bushels for ethanol use will be challenge because of the E10 blend wall
and the immaterial effect of EPA's bifurcated E15 approval."

Mike

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At 6:05am:

Lebanon purchased 25,000 metric tons of U.S. wheat Wednesday for delivery by the end of February.

For Argentina, this morning's weather forecast calls for scattered rain. Otherwise, the temps are expected in the high 80's-90's. Overnight markets are higher, with soybeans trading up 14 cents, wheat up 10 1/2 and corn up 4 cents.

Mike

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At 5:35am:

Early calls: Will be subject to the WASDE Report to be released at 7:30am CST Wednesday. Overnight markets are higher with corn up 2 cents, soybeans up 8 cents, and wheat trading 5 cents higher.

Trackers:

Overnight grain markets=Trading higher.

Crude Oil=$0.23 lower.

Dollar=Lower.

Wall Street=Seen opening higher as Portugal holds a bond auction.

World Markets=Higher.

Watch for the USDA Report numbers and trader reaction right here at 7:30am, following the release of the data.

More in a minute,

Mike

[nwobcw]

   The local elevator had the annual seed-marketing meeting last week.  Head marketer said they are loaded up with wheat, 40% of their 5 million bushel storage capacity.  He said other elevators in NW Ohio have similar numbers.  Also said they are making $.14 per bushel per month on the wheat.  Beans have hit $13.52 local price here 3 times, then retreat.  If there is no big news in today's report I'm thinking this is the ceiling until our planting-growing weather comes into play.  Right or wrong?

[Mike M2692830]

It would seem that this report only solidifies what has been said all harvest..lower production. Now the task at hand is to get the planted acres needed to get production back to a more stable amount and the weather to do it. We farmers can only control one of those....MikeM

[p-oed Farmer]

Good morning Mike..... To me this report only confirms what the market had been thinking all along....... IMHO..... We still need to ration usage.......Supply is now known....... p-oed

[oncearound]

those calls for the 5 Wave top recently need to view their charts in a mirror it would seem? that way they see the correct pattern,,,,,,a 5 Wave POP!!! lol

[jrsiajdranch]

Yet a trader says, "Bullish report but nothing dramatic. The USDA hedged bets again by leaving corn exports flat and lowering feed. My question is, if you lower feed in wheay and corn what do the dam animals eat? "

Tell that floor trader wrong question.  the correct one is Where did all the Dam animals go!?

I think report is very well uncommital USDA didn't rock any boasts they didn't lower feed enough to show the carnage in the livestock sector so they keep a lid on that boiling pot yet they also didn;t lower it enough to hurt the grains.

THey also didn't give any pops to the market so that C.B.and W could shoot the moon. 

Kinda the report I expected.

[4wd]

those critters are eating DDG's or wet cake from the ethol plants. I don't believe around here anyway, near as much raw corn is being fed as just a year ago. I think that is why the lower feed numbers. Cake isn't figured in. There are still lots of animals in feedlots eating every minute, but their diet has been changed.

[redrotor]

I've heard of guys keeping thier cattle on grass longer because corn is so expensive. But finished prices are shooting higher and feeders are following. Would someone pay big bucks for feeders and put them on grass? I'm guessing they're getting grain now which is sooner than expected a couple months ago. Local livesrock mrkt is quoting best Hols. price at 13-14 wt.and hard fed, whereas it was 15-17. Less silage and more grain.   

[Jed Stivers]

What's the report say on cotton?

[Jeff_a_Caldwell]

Mike's probably chasing somebody down with his video camera on the Floor in Chicago right now, so I thought I'd share a little of what the analysts said in a press conference there. Obviously, they're calling things higher in all pits -- not just short-term, either. Sounds like they see this driving higher prices for a while -- they agreed we need about 8-11 million more acres to meet demand, which is already awfully tight. Here's what I've got so far -- I'll have a full story on the site here after bit:

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We need more acres.

That's the biggest takeaway from Wednesday's USDA Crop Production and Stocks reports that ultimately indicate a balance table tilted strongly toward the demand side. And, for the first time in quite some time, it's not very clear where those acres are going to come from.

USDA released bullish crop and stocks numbers Wednesday, showing a combination of lower production and persistent demand worldwide for U.S. corn and soybeans, making for a tight marketplace that's right now being supplemented by unsteady crop weather conditions in crop areas around the world. That makes Wednesday's reports a bullish influence to the grain trade, and not just in the short term.

"The tightness is led by the corn market, but there's also a cinching-up in soybean acres," said David Hightower of The Hightower Report in Chicago Wednesday morning. "We really haven't passed through the weather pipeline in South America. We see that demand isn't rationing yet, and may get even tighter. These are very bullish, and it's a big-picture thing, not just an aberration."

What's the answer? More acres, adds Dan Basse of the Chicago-based AgResource Company, who says the U.S. will need at least 8 to 9 million more acres for corn and soybeans this year. "This leaves no room for error anymore," he said. "We will make new all-time highs for corn, soybeans and wheat futures."

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