From the floor January 4

[marketeye]

At the close:

The March corn futures settled 12 cents lower at $6.08 1/2. The March soybean contract ended 7 cents lower at $13.72. The March wheat futures closed 16 1/2 cents lower at $7.89. The March soybean meal futures settled $2.30 lower per short ton at $366.70. The March soyoil futures settled $0.75 lower at $56.95.

In the outside markets, the NYMEX crude oil is $2.17 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 14 points.

Mike

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At mid-session:

The March corn futures are 13 1/4 cents lower at $6.07 1/4. The March soybean contract is 13 1/2 cents lower at $13.65 1/2. The March wheat futures are 5 cents lower at $8.01. The March soybean meal futures are $3.90 lower per short ton at $365.10. The March soyoil futures are $0.84 lower at $56.87.

In the outside markets, the NYMEX crude oil is $2.58 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 20 points.

One analyst says, "This is primarily fund selling across almost all commodities today.  Really something, because the news today is rather bullish with hot and dry weather slated for South America and much below normal temps slated for the US Great OPlains next week potentially causing damage to crops.  Also the government of Argentina told Reuters that its corn crop is only 20 million tons, from 26 before.  Yet down we go.  I don't see anything in the outside markets either too much beut for the metals weakness.  Dollar is higher but not in an interesting way.  Seems like a chance for buy side people to get some pricing done to me."

Mike

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At 10:41am:

One analyst says the grains are getting hit from all sides. He says, "Two selling issues entered today. One, more forecasters are leaning to a wet forecast in Argentina this weekend, with several suggesting two more rains will follow in the 15-day outlook. The weather rally in corn started at 5.42 and beans at 12.00, basis March futures. So, there's plenty of weather premium to extract if rains continue. The second selling source was funds selling the board. Everything from hogs, cattle, grains, softs, metals, energies and so on. Last year, selling buy funds began after the January USDA Crop Report and the year prior on January 2. Funds need to get out of thousands of longs loaded upfront before re-positioning into longer term contracts."

Yet another trader says, "We are seeing lower prices in all the grain markets this morning due to profit-taking and a stronger U.S. dollar.  I see any weakness as a buying opportunity, as there is still strong demand from China and weather concerns in South America and Australia still plague the crops."

Mike

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At 10:20am:

Grain markets remain under heavy pressure. As we look towards the Jan. 12 USDA report, here are some early estimates from PFGBest.com. What do you think, high, low, or right where you would put the numbers?

World Ending Stocks:
Corn    = 122.00 million metric tons              
Soybeans= 59.20                   
Wheat   = 172.00                
 
US Ending Stocks:
Soybeans= 150 million bushels              
Wheat   = 848                 
Corn =790
                                                             
US CROP PRODUCTION                          
Corn  =  12.300 billion bushels                 
Soybeans= 3.280 billion bushels              
 
Winter Wheat Seedings:

All Winter= 39.610 million acres             
Hard Red  =29.400              
Soft Red  =6.600               
White     = 3.610 

Mike

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At the open:

The March corn futures are 5 1/4 cents lower at $6.26. The March soybean contract is 6 cents lower at $13.72. The March wheat futures are 9 1/2 cents lower at $7.95 3/4. The March soybean meal futures are $4.10 lower per short ton at $364.90. The March soyoil futures are $0.79 lower at $56.87.

In the outside markets, the NYMEX crude oil is $1.48 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 14 points.

Argentina rain, a higher dollar, lower overnight markets, and a setback from gains in the wheat market, are all factors pressuring grain prices today.

Mike

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At 6:45am:

Early calls: Corn 1-2 cents lower, soybeans 3-5 cents higher, and wheat 1-2 cents lower.

Trackers:

Overnight grain markets=Trading mostly lower.

Crude Oil=$0.33 higher.

Dollar=Lower.

Wall Street=Seen opening higher. Stocks, coming off a 2-year high yesterday, are expected to react to economic data and minutes of the Fed's Dec. meeting that wasn't all that positive.

World Markets=Higher.

Notes: Rain fell in Argentina yesterday, with more expected today. Another 1/4-1.0" expected towards the weekend. Plus, the temperatures are expected to cool off somewhat. By the way, I talked with a Brazilian contact yesterday. She says Brazil's soybean crop looks great. In fact, as I was talking to her she said it was raining there and the crops were doing well.

--The CME Group announced Tuesday an increase in December trade volume. On average, 10.5 million contracts were traded daily through December. Of those contracts, 83% were traded electronically. Specifically, volume for commodity contracts was up 37% vs. a year ago.

--Everest Re Group Ltd announced Tuesday that it bought Heartland Co-op Insurance for $55 million.

More in a minute,

Mike