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marketeye
Senior Contributor

From the floor January 6

At the close:

The March corn futures settled 17 1/4 cents lower at $6.02. The March soybean contract closed  15 1/2 cents lower at $13.78. The March wheat futures ended 19 1/4 cents lower at $7.89. The March soybean meal futures settled $3.90 lower per short ton at $369.10. The March soyoil futures closed $0.35 lower at $57.41.


In the outside markets, the NYMEX crude oil is $0.15 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 25 points.

 

Mike

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At mid-session:

The March corn futures are 14 1/4 cents lower at $6.05. The March soybean contract is 12 1/4 cents lower at $13.81. The March wheat futures are 12 3/4 cents lower at $7.95 1/4. The March soybean meal futures are $3.90 lower per short ton at $369.10. The March soyoil futures are $0.33 lower at $57.43.


In the outside markets, the NYMEX crude oil is $2.17 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 43 points.


Grain prices remain lower. One analyst is saying, "We are lower today!  Looks like a little more spec and fund selling here today on weaker jobs data and US Dollar strength. Basis in the country and at the Gulf also on the weak side, reflecting light demand. So, not a lot for the bulls today.  Export sales were not strong for corn and soybeans and I suppose much demand is shifting south.  Informa numbers seem a bit high to me but then they usually are. And, yes, it seems like we want to trade choppy but perhaps with a weaker tone into the reports next week."

 

Mike

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At the open:

The March corn futures are 4 1/2 cents lower at $6.14 3/4. The March soybean contract opened 5 1/2 cents lower at $13.88. The March wheat futures opened 5 1/2 cents lower at $8.03. The March soybean meal futures opened $3.80 lower per short ton at $369.20. The March soyoil futures opened $0.40 higher at $57.79.


In the outside markets, the NYMEX crude oil is $1.22 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 6 points.

 

Mike

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At 7:32am:

USDA released mostly weak export sales Thursday. For corn, the Weekly Export Sales report estimated last week sales of 369,000 metric tons, the trade expected 500-700,000. Soybean sales were 552,700 metric tons, while the trade expected 700-900,000. USDA says wheat sales were 464,700, above the trade expectations of 350-450,000. Soymeal sales were estimated at 29,000 vs. the trade expectations of 100-150,000 metric tons. Soyoil sales were estimated at 13,000, within the trade estimates of 10-30,000 metric tons.

 

Mike

--------

At 6:05am:


Early calls: Corn mixed, soybeans 2-3 cents lower, and wheat 3-5 cents lower. USDA Weekly Exports will be released today. The estimates are: Corn-500-700,000, soybeans 700-900,000 metric tons, wheat is seen between 350-450,000, soymeal at 100-150,000, and soyoil at 10-30,000 metric tons.


Trackers:

Overnight grain markets=Trading lower.

Crude Oil=$0.37 lower.

Dollar=Higher.

Wall Street=Seen opening higher from the private sector jobs report released yesterday. Today, the Weekly Jobless Claims report is expected to throw more bullish fuel on the stock market's fire. As a lot of other sectors in the U.S. economy have signaled a recovery, investors are awaiting the job market to make a positive move. Today's report, along with the much anticipated non-farm payroll report, released tomorrow, carry high expectations. 

World Markets=Higher.


Here's the scoop: Yesterday, on the trading floor, I had an interesting conversation with a grain analyst. He says it's no surprise the market is rallying into the Jan. 12 Report. But, after the report look out, the floor could sag and maybe even dropout in a few places. Here's why? "The funds started this rally and they will take it away. This is what they do. And right now, the funds are especially long these grain markets. After the Jan. 12 USDA Report, I see the funds selling 80,000-110,000 contracts. They have to. They are long. Plus, they don't want to get into trouble with the government. They are going to sell to get ready for repositioning themselves for their eventual summer long positions.

 

Here's  the plan: The analyst adds, "If I were a farmer, I would sell the report, wait for the funds to sell-off and then I would buy back those bushels at a lower price and sit on them until the summer rally. He smiled, nodded and repeated, "That's what I would do."

 

Today's Weekly Export sales are expected to be weak. Buyers are waiting for the market to shake off the current rally, perhaps after the Jan. 12 report. Then buying will start towards the end of the month, one analyst says.

 

Side Note: I know we are talking a lot about Argentine dryness. However, it's not inconceivable that the market could be concerned soon about soybeans sitting in water in Brazil. Keep an eye on the continued rainfall that Brazil is getting, so I'm told my marketwatchers.

 


More in a minute,

 

Mike

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17 Replies
p-oed Farmer
Senior Contributor

Re: From the floor January 6

Wow Mike..... That is a lot of what If's from those guys.......:~).....p-oed

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jrsiajdranch
Veteran Advisor

Re: From the floor January 6

Good morning mike.  Is it alright if I throw a little cold water on this rally?  THe Jan. 12 report will be interesting to watch from the demand side.   With weekly expoerts consistently in the lower range of trade estimates don't they at the USDA have to lower the export number?

 

Also with a reduced pig herd. Smallest cow herd since the 50's, THe dwindlinng dairy herd. ( which will go much faster than the historical numbers we are used to).  ANd smaller poultry numbers.  How does ethol make up for all that?

 

What happens if the Usda drops demand by 300 milllion again?   Then you take into account the traders comments about exiting funds and don't you have the perfect storm? 

One more amtecdotal note. one of the BTO's in my area has been into the firm that he markets his crops thru to see how he can et out of contracts made during the summer lows.  That tells me the top is in.

I guees what if we have an ending stocks number of 1.2 to 1.3 billion?  DOesn't that mean we retest the summer lows?JR

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marketeye
Senior Contributor

Re: From the floor January 6

jriajdranch,

 

You bring up some interesting points. I won't pick all of them apart. I will just say this, there are a lot of analysts that see the ethanol industry cranking up the production volume as high as they can get it. In fact, one analyst was quoted the other day saying, "Those ethanol guys, they are really humming."

 

So, maybe ethanol can and will make up for smaller herdsize, don't know.

 

And by the way, keep the cold water coming. 🙂

 

Mike

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marketeye
Senior Contributor

Re: From the floor January 6

That's because they are all scratching their heads, trying to figure out which way this baby is going to go, following that report. The thinking caps are on, don't think they aren't.

 

Mike

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p-oed Farmer
Senior Contributor

Re: From the floor January 6

jr...... You talk about poultry #'s being down.... It seems to me that I read that there #'s were up slightly from last year?....... You talk about "smallest cow heard" ...... Hasn't this been known for a long time?....... I have no opion on the dairy you have a better handle on that...... The ethanol usage has quite frankly been grinding along at a pace that would use closer to 5.1 bil bu compared to the 4.8 bil that USDA used on there last report....... My point is the odds of the demand going down from this report is low from my perspective......

 

Hell..... We haven't talked about the possibility that Exports could be crazy if the china thing materializes this year...... Along with how the USDA reconciles the ending stocks issues from there sept report that my have included new corn with old stocks?...... IMHO..... From what I have read the US farmer is pretty much as a whole sold out of corn (Around 80%) I am told....... If the funds do not sell there is going to be a void above this mark as the natural shorts (Farmers) will not be there to slow this thing down......  The most bearish thing that I could think of for this report would be the yield staying the same and possibility of acres going up a little......That could happen....... But the market does not expect that to happen today......p-oed

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jrsiajdranch
Veteran Advisor

Re: From the floor January 6

Poed I don't have time to go back and post all the numbers but it is like this.  Poultry numbers are up over year earlier levels but that is kinda like comparing the economic activity of the day before 911 and the day after.  2008-2009 were full of huge liquidation so we have not gotten these numbers back up to 2007 numbers. JR

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ohio474
Contributor

Re: From the floor January 6

 

     Question  with all this news and positions , if the report comes in bullish or netural ,do the funds run up prices for say two days ,[limit or close to it ] them dump before the end of the week , to pocket  huge profits ?    Is that how it works?   Then start again the next week , and in the meantime  end users fill up on low prices?

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marketeye
Senior Contributor

Re: From the floor January 6

It's been known to happen over a 9-day period. But, that doesn't mean it will be like that this year. To further the point, below is a chart showing how they exited the market, or rather lightened up, in the past few years. Here's 2009 where we had a Dec. break then a rally into months-end followed by funds selling after Jan. 2. Notice, that in 2009, the funds exited before the Jan. USDA Report. I have a chart that shows they did the same in 2010. Do you want to see that one too?

 

Fundsexit.jpg

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ohio474
Contributor

Re: From the floor January 6

 

    wow    thanks for the chart.   if you have time  yes.   thanks again   Stan

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