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marketeye
Veteran Advisor

From the floor July 14

At the close:

The Dec corn futures closed 9 1/4 cents higher at $3.96 1/4. The Nov. soybean contract finished 7 1/2 cents higher at $9.62. The Sep. wheat futures settled 9 3/4 cents higher at $5.59. Dec. soybean meal futures are $2.70 higher at $279.60 per short ton. Dec. soyoil futures are trading 9 points higher at 38.90.

 

In the outside markets, the NYMEX crude oil is $0.21 lower per barrel, the dollar is lower, and the Dow Jones Industrials are down 13 points.

 

Mike

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At 12-Noon:

Corn is up 9 cents, soybeans trade 8 cents higher, and wheat up 10 cents. Don't forget the July futures contracts expire today. A few screams here and there, but the floor is fairly quiet.

 

Mike

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At 11:15am:

So, I told you about the Iowa Farm Bureau group visiting the CME Group floor today. Our good friend Scott Shellady, GFI Group floor trader, spoke to the farmers. The farmers made him blush when they asked him if he's satisfied with his career. Or, was the question why did you choose this career? $$$$$$.

 

Anyway, a spokesman from ADM addressed the group. FWIW: This person is bearish on the stock market, feels like when the dollar is up, the grains will trade lower, and vice versa. The speaker also mentioned the market seems to be bullish corn, bearish beans and wheat, longer-term. Because of the lower ending stocks in the June 30 report, the market wants to buy 5.0 million corn acres.  The speaker also feels like once the it digests the corporate earnings season reports, the stock market may be headed for trouble. The dollar could sink, helping exports, but slowing the economy.

 

Mike

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At mid-session:

The Dec corn futures are 9 1/2 cents higher at $3.96 1/2. The Nov. soybean contract is 11 cents higher at $9.65 1/2. The Sep. wheat futures are 12 1/2 cents higher at $5.61 1/2. Dec. soybean meal futures are $3.10 higher at $280.00 per short ton. Dec. soyoil futures are trading 19 points higher at 38.90.

 

In the outside markets, the NYMEX crude oil is $0.67 lower per barrel, the dollar is lower, and the Dow Jones Industrials are up 42 points.

 

Goldman Sachs has upped their 3-month price forecast for the grain markets. For the 3-month period, GS sees corn reaching $4.15 vs. their previous estimate of $3.75 per bushel. For 6-months out, corn prices are seen reaching $4.50 vs. $4.00, based on demand.

 

Soybean 3-month outlook seen at $9.75 v. $9.25, 6-mo. out GS sees prices reaching $9.50 vs. $9.00.

 

Wheat's 3-month outlook is seen at $5.20 v s. $4.75. And the 6-mo. outlook is seen reaching $5.50 vs. $5.00.

 

I'd be interested in hearing what you guys think of these estimates. What say you?

 

Mike

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In early trading:

The Dec corn futures are 7 cents higher at $3.94. The Nov. soybean contract is 12 1/2 cents higher at $9.67. The Sep. wheat futures are 12 3/4 cents higher at $5.62. Dec. soybean meal futures are $4.10 higher at $281.10 per short ton. Dec. soyoil futures are trading 16 points higher at 38.97.

 

In the outside markets, the NYMEX crude oil is $0.42 lower per barrel, the dollar is lower, and the Dow Jones Industrials are up 24 points.

 

One trader says the markets are underpinned by the talk of hot/dry weather next week. He says, "We're still in Chicago. This week, we're supposed to see four days of 90-plus weather. Last year, we saw one day in a few months. So, the mentality is buy and certainly not sell."

 

Mike

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At 6:54am:

Hey guys and gals what's going on this morning? It's sunny here in Chicago. We will have some young farmers visiting the floor today. The group is from Iowa represented by the Iowa Farm Bureau. It's always great to see folks from the countryside rub elbows with these traders.

 

Elsewhere, CNGOIC, a China think-tank released unchanged China 2010 corn and soybean production estimates. The group pegged China corn production at 168 million metric tons, up 2.5% from a year ago. Soybean production is estimated at 14.5 million metric tons, down 3.3% from a year ago.

 

Also, Taiwan, Wednesday, bought 57,000 metric tons of U.S. soybeans.

 

Mike

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At 6:35am:

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

 


Trackers:

Overnight grain=Traded mixed.

Crude oil=$0.43 per barrel lower.

Dollar=Trading higher.

Wall Street= Seen opening higher on better Intel company earnings than expected. The stock market is headed for its seventh straight day of gains.

World Markets=Trading mostly higher.



More in a minute,


Mike

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9 Replies
p-oed Farmer
Senior Contributor

Re: From the floor July 14

One would have to conclude that if a guy was a part of a think tank in china that there would not be much of a future telling the gov over there that things are bad...... Only tell the good I would think..... Who knows..... p-oed

SouthWestOhio
Senior Contributor

Re: From the floor July 14

If 90-degrees in downtown Chicago can move corn up 10 cents, think what 100 could do! Smiley Happy

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Palouser
Senior Advisor

Re: From the floor July 14

The fellow from ADM sounds a bit behind developments in wheat. Until the heat wave breaks in Russia it will probably dominate the trend in the short term. I think another interesting issue is people look at the large inventory developing in the US as bearish but, the irony may be that the US will have the lion's share of exportable stocks of wheat. If this trend continues  this year then US wheat exports could increase by a large amount.

 

Wheat is global. Importers must go where the stocks are. There won't be large differences in prices one region vs the other. An attempt to procure 'cheaper' wheat in one area would quickly drive up prices enough to move purchases elsewhere. A sign of this kind of situation developing could show itself in the next couple of months as importers hedge their needs by beginning to diversify origins.

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zman343
Contributor

Re: From the floor July 14

Rain, then heat?  Oh my, the crops won't like that!  Last year guys complained that the crops didn't get enough heat.  Result: record crops.  So far this year crops getting moisture and more heat.  Result???

 

Goldman looks to be a little behind, both wheat and beans are at or above their price targets.

 

I agree with the ADM spokesman.  All real economic indicators (corporate earnings don't count) don't spell recovery.  Equities will head south again and dollar will bounce higher when euro crashes on its way to parity.

 

Alot of interesting articles lately on pension funds that are underfunded.  Looks like Illinois is going to issue bonds.  The Illinois comptroller said in a CNN article that Illinois was "leveraging our future and that's not the correct approach, but it was what was chosen out of a lot of bad options."  Wonder if that will be in the sales pitch.

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hardnox604008
Advisor

Re: From the floor July 14

Yeah, sign me up for a few $billion of those.

 

Probably should have anticipated the meltup in equities- never been a time when I've heard more people squawking about head and shoulder tops, death crosses, cardinal climaxes etc.

 

Still with you though, longer time like down on comms and equities, up with the buck.

 

Best, h

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hardnox604008
Advisor

Re: From the floor July 14

BTW- here's how you make this thing work-

 

The California Pension Fund buys bonds from the Illinois pension fund which buys bonds from the Michigan teachers' fund.............

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zman343
Contributor

Re: From the floor July 14

Borrow from Peter to pay Paul.  Didn't they lock up Madoff for that?  In this scenario, just one default or haircut turns into a domino effect.  Even the threat of such occurrence would send shockwaves.

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dapper7
Senior Contributor

Re: From the floor July 14

agree with the adm guy, noxies favorite, bdi still slowing and rail freight traffic now slowing as well. not signs of an economy on the rebound. not sure on the dollar, could be an extention lower. 9, 18, 40 day averages all pointing lower. d7

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tree fmr
Advisor

Re: From the floor July 14

All this talk of the dollar lower or higher is interesting but here in Japan the actual rates have stayed between 85-89 yen to the dollar for many months.

Thanks for all the great updates marketeye!

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