From the floor July 16

[marketeye]

After the close:

Wheat Option Talk: One trader says, "Thursday represented the sort of tone change that every big market experiences.  It's just that most people watching this crazy wheat over the last two weeks thought a day like this would have come much sooner.  But all that doesn't matter anymore, because we are now officially running without tether, and by the looks of the closing action the Dec. wheat is now poised to make easy work out of a trip to $7.00.  Implied levels were up 6% in the front and 4% in the further out Dec., with huge volume.  Just shy of 50,000 contract on the day easily made Thursday the heaviest trade we've seen in almost two years, dating back to the historic rally back in 2008."

Mike

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At the close:

The Dec corn futures close 2 cents higher at $4.07 1/4. The Nov. soybean contract settled 3 cents lower at $9.85. The Sep. wheat futures ended 9 cents lower at $5.87 1/4. Dec. soybean meal futures settled $0.40 lower at $290.00 per short ton. Dec. soyoil futures closed 31 points lower at 39.06.

In the outside markets, the NYMEX crude oil is $0.68 lower per barrel, the dollar is lower, and the Dow Jones Industrials are down 217 points.

One floor trader says, "The trade took profits then tried to sell this market. The markets got quiet in the middle of the session and then at the end of the day, traders bought the close to cover up for the weekend. So, we had a rally on the close, not a huge one. On the heat dome, the local Chicago weather-guy, Tom Skilling, is still saying hot/heat dome. I think more people are leaving the floor thinking heat dome vs. the latest European weather model that says not as hot next week. The traders walked out of here thinking hot weather until the end of July."

Mike

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At 12:25pm:

Wheat has fallen sharply due to profit-taking. Also, corn is down a few pennies and beans are trading 7 cents lower. A new weather forecast shows the heat dome still moving into the Midwest next week. However, it now looks like it will not stick around as long as first thought, lessening the crop damage. So, that has the market retreating. Plus, the Dow is down 226 points, the crude oil market is down $1.33. So, there is not a lot of support in any direction.

Mike

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At 10:25am:

The Dec corn futures are 1 1/4 cents lower at $4.03 3/4. The Nov. soybean contract is 3 cents lower at $9.85. The Sep. wheat futures are 9 3/4 cents lower at $5.86 1/2. Dec. soybean meal futures are $1.60 lower at $288.80 per short ton. Dec. soyoil futures are trading 17 points lower at 39.20.

In the outside markets, the NYMEX crude oil is $0.79 lower per barrel, the dollar is lower, and the Dow Jones Industrials are down 172 points.

The VIX, the measuring stick for nervousness in the markets is up 10%.

One analyst says, "We saw light profit taking on the open as profitable longs on the week went to the bank with trades rather than risk Mondays open as profits this week came off weather forecasts for a heat dome to move into the Midwest next Tuesday. Traders know it’s a long time in the weather business from Friday to Monday and forecasts could change .I don’t expect any big break today as forecasts are extremely threatening but over bought conditions and risk should keep gains limited as well."

Mike

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At 6:50am:

China's July soybean imports will be 5.8 million metric tons, up 32% from a year ago, China's Ministry of Commerce reports Thursday.  ADM Thursday sold 20,000 metric tons of U.S. soybeans to South Korea for August delivery.

U.S. Democratic lawmakers are considering lowering a tax credit for ethanol blenders from 45¢/gall. to 36¢. The tax credit is scheduled to end in December. So, the plan is to lower it and and extend it another year, the Dow Jones newswire story indicated. Here's a good question for you. What do you think about the gov't lowering that ethanol tax credit? How will it impact corn prices? Is this a slippery slope to phase out ethanol or a needed measure to keep ethanol viable??? What do you think?

Mike

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At 6:35am:

Early calls: Corn and soybeans up 1-2 cents, wheat down 2-4 cents.

Trackers:

Overnight grain=Traded mostly higher.

Crude oil=$0.11 per barrel higher.

Dollar=Trading lower.

Wall Street= Seen opening flat as more company earnings are reported. GE and Bank of Americas released higher higher 2nd quarter earnings this morning. Congress approved the most widespread financial changes Thursday since the Great Depression.

More in a minute,

Mike

[jec22]

We just had the biggest environment disaster is US history in the Gulf.  I know big oil in is the back pockets of the congressmen, so hoping that they will also cut some of the huge tax subsidies to big oil is surely a pipe dream.  If oil didn't have the tax subsidies, ethanol would not need any.  But of course, I am one that wants to end farm subsidies also.

[p-oed Farmer]

I think that the day the E-Industery will have to stand on it's own two legs is most likely closer than most think...... I am expecting that they will drop the subsidy and replace it with a mandate of use of some sort?????? The white house will not want the e-plants all going broke........ p-oed

[teaspoon73]

Ethanol plants do not see any of that tax credit. Big misconception there. The petroleum blender gets that. It was originally intended to be passed on to the consumer. When you get out of the midwest it is rarely passed onto the consumer. The petroleum marketer just keeps it. The ethanol industry gets blamed for this tax credit and the petroleum marketers suck it up. Why don't you take the petroleum industry's tax incentives away from them. They are going to raise the price of fuel Americans pay dramaticlly. Raise the blend wall to 15%. . This would lower fuel prices, make your air cleaner, and help reduce our trade deficit. Create more jobs in America. Want to end the fuel shortage? Make every cars sold in America a flex fuel vehicle. Cost is $50. per vehicle. Then use your tax credit for blender pumps at filling stations. The consumer could have freedom of choice! Gasoline, 10% ethanol, 30% ethanol , 85% ethanol. It would become a pricing issue.  Remove tax credits for ethanol and petroleum. But you never hear of a politician talking about the petroleum industry's tax incentives. They are written into the tax code. Want to really save money!!! Take all our troops out of Saudi Arabia and the middle east.  Rmove the two carrier groups from the Indian ocean. Let the Arabs protect their shipping lanes! Now you are looking at the real cost of Gasoline!!!

[4wd]

I'm starting to get sick of my Demo party folks in charge. First they let the tax depreciation and expense provisions expire, resulting in a roll back to a $120k max expense in any one year, and now, they are wanting to cut the ethanol subsidy?

Why doesn't someone in DC look at big oil and what they gouge out of the US tax code and subsidies?

[aginvestorr]

135000 in 2010

25000 in 2011

SEction 179 expense deduction figures unless something changes.

[jec22]

My tax advisor say 250,000  179 exp. for 2010.  Haven't asked about 2011

[Palouser]

What is the Repub position on handouts?????

[SouthWestOhio]

On every issue the republicans just seem to say no, whatever that means. 

[dapper7]

i think the biggest long term news of the day is the financial(ahem) regulation bill passed by the senate. another 2300 plus pages that nobody read. wonder what hidden gems made it under the wire this time. left or right they all suck!  more change you can believe in. or so they say. i used to laugh when my grandparents(4) said this country is going to hell. im not laughing anymore.  just one more step to the collapse of the american empire. d7