From the floor January 5

[marketeye]

Here's a video with David Hightower of the The Hightower Report previewing the USDA's Jan. 12 Report.

Here is the link:   http://tinyurl.com/2blbamz

Mike

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News nuggets: The world's most destructive pest of grain products and seed was found Wednesday at the LA Airport. The khapra beetle and larvae made its way to the U.S. on a shipment of Indian rice that came from Saudia Arabia, according to news reports. The USDA quarintined and destroyed the rice shipment. The khapra can live a longtime without food and has little reaction to insectides and fumigants, a Reuters news report indicated. Do you know any entemologists to ask about this grain killer?

Mike

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At the close:

The March corn futures settled 10 3/4 cents higher at $6.19 3/4. The March soybean contract closed 24 cents higher $13.83 1/2. The March wheat futures ended 19 cents higher at $8.08 1/4. The March soybean meal futures settled $5.20 higher per short ton at $373.00. The March soyoil futures closed $0.91 higher at $57.76.

In the outside markets, the NYMEX crude oil is $0.92 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 34 points.

The funds helped push up prices Wednesday. It's estimated that the funds bought 12,000 corn, 6,000-7,000 soybean, and 5,000 wheat contracts.

Mike

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At 10:30am:

Prices reverse! Corn is up 3 cents, soybeans up 16 cents, and wheat lags. One analyst says, "Well a reversal from yesterday, that is for sure.  Even a higher dollar can't stop this train, I guess.  I still think that the rains yesterday, estimatyed by Mike Palmerino at 0.2 to 0.6 inch, werenot super and a reason to do a sell the rumor buy the fact trade.  Plus, we had some super jobs data out this morning that probably is supporting demand ideas.  I have heard of no real demand interest although Chinese buying for 11-12 beans could continue as I understand the margins are good that far out, not so good nearby.  Plus, Gulf basis was lower yesterday but stable today.  The rally is beans and corn leading and the rest following which suggests that the weather down south is still running a lot of this show."

FYI: Mosaic released 2011 U.S. Acreage estimates Wednesday;

Corn=92.93 million

Soybeans=77.78 million.

What do you think? Are these numbers high?

Mike

Mike

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At the open:

The March corn futures are 6 1/4 cents lower at $6.02 1/2. The March soybean contract is 3 1/4 cents lower at $13.6 1/2. The March wheat futures are 8 3/4 cents lower at $7.80 1/2. The March soybean meal futures are $0.80 lower per short ton at $367.00. The March soyoil futures are $0.13 lower at $56.73.

In the outside markets, the NYMEX crude oil is $0.72 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 17 points.

Mike

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At 8:10am:

Strong jobs report, this morning, is pushing up the U.S. Dollar. Could be tough for grains to get any traction today.

Mike

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At 7:35am:

Here's what sticks out ahead of this morning's open:

--Argentina is getting just enough rain to get the soil wet. Not deepening soil moisture levels, but still enough to satisfy the psyche of the market, maybe.

--Australia's flooding event is set to hurt that country's beef exports. As a result, maybe U.S. cattle prices get a boost.

--China is saying its 2010 corn output estimate is 172 million metric tons, down 940,000 tons from its previous estimate. Any lower number from a country that needs more corn is not good, do you think?

Mike

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At 6:35am:

Early calls: Corn 3-5 cents lower, soybeans 2-3 cents lower, and wheat 7-9 cents lower.

Trackers:

Overnight grain markets=Trading lower.

Crude Oil=$0.92 lower.

Dollar=Lower.

Wall Street=Seen opening lower ahead of private sector employment numbers. The bigger report will be tomorrow's non-farm payroll. In general, today's stock setback is seen to be short-lived as many investors begin to feel positive about a recovering economy, stock analysts say. In December, U.S. auto sales jumped 11%, manufacturing orders are up, and analysts see S&P 500 index  companies reporting fourth quarter earnings 32% higher vs. a year ago.

World Markets=Mostly lower.

What say you? Do you feel the economy is getting better around you? Good economic news is bad for the stock market, the smart people say. Has the strong agricultural economy convinced you the economy is improving? If so, does this affect your grain marketing decisions or are the two separate, in your mind?

More in a minute,

Mike

[winger667304]

Good morning Mike, yes I believe whether we like it or not the economic influence of the factors outside ag continue to have an increasing effect on our bottom line. With regard to marketing decisions probably in the past the market action of the last few days would caused me to push the sell button but this year based on what is forecast for commodities in general I am willing to ride this market for a little longer. i listen to Bloomberg or CNBC everyday going to and from the off-farm job and the sentiment from the anylysts is that the grains are the best place to put your money because these markets are demand driven. They indicate that there will be minor setbacks from time to time but these will be offset by increasing demand and a finite supply. I have always been of the opinion that in Canada anyway a strong ag economy is a great boost for the overall economy as farmers hate to have money sitting around and will reinvest providing great spin off for the rest of the economy.

[marketeye]

winger667304,

I agree with you on two fronts. First, you're right about not hitting the sell panic button. There does seem to be a lot of bullishness still to help support this market. Also, farm equipment dealers would be able to verify your thought that a strong farm economy can mean positiv reinvestment into the general economy. New or used, a lot of farm equipment has been moved off the lots around the world, not just in the U.S.

Great comments from you and thanks for stopping in. Keep listening to the radio, it's still a great medium, despite a tough decade past.

Mike

[Canuck_2]

Morning Mike.

First I want to tell you I appreciate your daily reports, keep up the good work.

I note you mention some rain in Argentina and I check this site when I want to get an idea of weather in Argentina

http://uk.weather.com/weather/10day-Cordoba-ARCA0023

I can not tell you how big an agriculture area it represents but just look for type of weather they are getting. I have been watching the last few days as the markets have been talking of this rain coming to Argentina but the highest I have seen on it is this morning with a 50% chance of showers. It has consistenly called for temperatures of 30-32C so a few showers will not last long with heat like that every day.

So I have been holding off on a sale of corn I would like to make in this time period.

As for your question on the economy around me, it never got too bad here just a few in automotive for awhile when GM was teetering that wondered about their jobs but all seems well after they refinanced.

Agriculture.... Lots of swine in this area and they are not faring that well. Most now are just workers in their leased barn and the rentals for the barns have fallen considerable but they have the barn so still rent it to get some cash flow. And there have been a number of swine barns closed and some torn down this past summer.

Resurgance of dairy in my area over the last 15 years and with their quota they are not hurting like jr and dairy in your country.

The quota sector has been buying land and builing new barns so they have helped farm suppliers.

Getting to be fewer 'cash crop' farmers as many retire and either sell to quota or rent to a few BTO so not sure it is all good for machinery dealers as we seem to have fewer dealers all the time.

Definitely big changes in the agriculture community, most 'farm' houses now house workers from urban areas, and I do not expect that to stop.

So I do not think the changes in economy impact my grain marketing at all.  

[Jim Meade / Iowa City]

I treat grain marketing and the economy as separate, for the most part.  I market what I have as well as I can.  I produce based on expectations and what my land does best.  So, it's mostly corn and soybeans and at my age I'm not getting back into livestock (although I think a general farm is the best place to be).  In other words, I farm as well as I can and expect the economy to do what it does.

[SouthWestOhio]

You just can't keep a good market down. Glad to see the uptick today but am surprised it happened so soon.