From the floor July 27

[marketeye]

At the close:

The Dec corn futures settled 1 cent lower at $3.77. The Nov. soybean contract ended 3/4 of a cent lower at $9.65 1/2. The Sep. wheat futures settled 5 1/2 cents higher at $5.95. Dec. soybean meal futures ended $0.80 higher at $278.30 per short ton. Dec. soyoil futures closed 27 points lower at 39.29.

In the outside markets, the NYMEX crude oil is $1.37 lower per barrel, the dollar is higher, and the Dow Jones Industrials are up 29 points.

Mike

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At 12:35pm:

Other than wheat trading up 7 cents, corn is just up slightly, beans are down slightly.

So, while the floor is quiet, I'll share with you what the traders are talking about. One trader says the trend-following funds and the index funds are holding 2.0 billion bushels of long positions. For corn alone, they are long nearly 600,000 contracts, a record. One trader is talking about how 'short' the commercials are and how 'long' the funds are. He says one well-respected commercial sees Dec. corn going to $4.35 per bushel before its expiration Dec. 15. Another trader is complaining that the CME Group still believes there is such a thing as old-crop and new-crop soybean oil. He says, "Come on, once its crushed its crushed. There's no old-crop, new-crop in that." Let me ask you, yeah, you the one that's reading this, do you think there is such a thing as new-crop and old-crop oil? His beef is the CME Group has trading charges for both.

I have another trader asking me how bad the leaf-spot issue is on corn. Can anyone give me a feel for how bad this pressure is on the corn in your area?

Thanks,

Mike

At mid-session: The Dec corn futures are 3/4 of a cent lower at $3.77 1/4. The Nov. soybean contract is 1/2 of a cent lower at $9.65 1/2. The Sep. wheat futures are 3 cents higher at $5.92 1/2. Dec. soybean meal futures are $1.50 higher at $279.00 per short ton. Dec. soyoil futures are trading 26 points lower at 39.30.

In the outside markets, the NYMEX crude oil is $1.53 lower per barrel, the dollar is higher, and the Dow Jones Industrials are up 21 points. A drop in consumer confidence has sunk commodities.

As of this morning, corn is trading 60¢ higher vs. a year ago, soybeans are up 40¢, and wheat up 80¢ vs. a year ago.

One trader says a well-respected commercial believes Dec. corn will trade as high as $4.35 before it expires. Yet another trader says laughing, "With Dec. expiration over 100 days away, yeah, it will trade at $3.45 and then $4.35."

Mike

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At 10:20am:

The U.S. Coast Guard Tuesday shut down the Mississippi River just north of Memphis, TN due to a hazardous chemical spill. Will the markets care? One trader says he is hearing the river will be shutdown for about a week. However, because it's not harvest season, the traffic flow is slower at this time of the year and the markets will see little impact.

lenntech.com describes acrylonitrile, the chemical that fell into the Mississippi, as one that is used, "Primarily as a co-monomer in the production of acrylic and modacrylic fibers. Uses include the production of plastics, surface coatings, nitrile elastomers, barrier resins, and adhesives. It is also a chemical intermediate in the synthesis of various antioxidants, pharmaceuticals, dyes, and surface-active agents. Formerly, acrylonitrile was used as a fumigant for food commodities, flour milling, and bakery food processing equipment."

This might be too much information. You might not care. It dosn't look like the markets care.

Mike

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At 9:50am:

The market shot higher, on the open, and then settled back. Corn and beans are now up just a few cents, wheat a dime. The market ran out of buyers and now the floor is quieter vs. the open, traders say.

Mike

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At the open:

At the open: The Dec corn futures are 4 1/2 cents higher at $3.82 1/2. The Nov. soybean contract is 7 cents higher at $9.73. The Sep. wheat futures are 12 1/2 cents higher at $6.02. Dec. soybean meal futures are $2.50 higher at $280.00 per short ton. Dec. soyoil futures are trading 1 point lower at 39.55.

In the outside markets, the NYMEX crude oil is $0.60 lower per barrel, the dollar is higher, and the Dow Jones Industrials are up 16 points.

The open was nothing other than a 'dead-cat bounce' only. The talk of Russia halting grain exports was proved to be wrong, the market ran out of buyers quickly. Plus, the crop conditions improved, especially the excellent ratings, and technically the market was oversold, and that was pressure for the market, one trader says. Overall, the prices are afraid to break too much due to the August 11 USDA report approaching, he says. Traders think the USDA will be close on their number for corn.

Mike

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At 8:38am:

There's word that China is complaining about the quality of arriving U.S. corn shipments. Mould apparently is showing up. A Reuters story quotes a China source saying the corn could be fed to ducks, not pigs. I'll try and find out what credence the traders are giving to this news.

Mike

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At 7:10am:

UPDATED: Early calls: Corn up 4-6 cents, soybeans up 5-7 cents, and wheat up 5-7 cents. Higher calls are getting strength from world crop-weather problems and 'outside' market support.

Mike

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At 6am:

There are a few things to talk about this morning. It's a beautiful morning for the RAGBRAI bike riders in Iowa, but I digress. Japan followed through with that Friday-announced tender for 153,326 metric tons of wheat, mainly of U.S. origin. The recent Midwest wet weather may be causing some lodging in the corn crop. Otherwise, looking ahead 8-10 days, the U.S. and European model forecasts are calling for normal rains and basically normal temps. No real extremes mentioned.

Perhaps the biggest piece of news for the market, this morning, comes out of Russia. Russia, due to drought, has lowered its 2010 grain production from 85 million metric tons to 75 mt. The conditions are getting so bad, Russia may curb their grain exports significantly for 2010. Will the U.S. pick up any marketshare due to a shortage of Russian wheat?

Mike

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At 6:35am:

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

Trackers:

Overnight grain=Trading mostly higher.

Crude oil=Trading $0.12 per barrel higher.

Dollar=Trading lower.

Wall Street= Seen opening higher for a fourth straight session. Bouying the market is the strong results from European banks. Also today, a number of companies release quarterly results.

World Markets=Mixed with Europe stocks higher and Asia/Pacific lower.

More in a minute,

Mike

[p-oed Farmer]

The Chinese need to hammer the exporter's as they have already hammered the farmers..... p-oed

[jec22]

I have heard that the corn that is exported is a lot different looking than what comes out of the combine/bin.  Doesn't grain have to be inspected before it leaves for export?  Can China reject for quality and demand a new shipment?  Last years grain problems can't be put behind us soon enough. 

[SouthWestOhio]

I read in the past few days that as much as 1/5 of China's stored corn is already experiencing mold problems.  That report made it sound like the mold was in their crop, not ours.

[marketeye]

The mold is 'supposedly' in the U.S. corn shipments. I say supposedly because this stuff is still unconfirmed.

Separately, here's something new, the U.S. Coast Guard Tuesday shut down the Mississippi River just north of Memphis, TN due to a hazardous chemical spill. Will the market care? Not sure yet.

Mike

[SouthWestOhio]

Here is the corn story I read back in June.

Corn stockpiles in China's Heilongjiang and Jilin provinces have slumped more than 15 percent and "supplies show significant signs of degradation," with as much as 30 percent of the grain in some storage facilities affected by mold, the council said last week.

Corn supplies in the northeastern Jilin province, China's top producer, may be facing damage from mold because of high temperatures, Sina.com reported on June 10, citing industry website China Corn.


http://www.chinadaily.com.cn/business/2010-06/18/content_9988609.htm

[SouthWestOhio]

and then there is this story dated today on sina.com


BEIJING - China's corn imports will skyrocket from 1.7 million tons this year, to 5.8 million tons next year and as much as 15 million tons in 2014-2015, the US Grains Council said in a recent report quoting Hanver Li, chairman of Shanghai JC Intelligence Co Ltd.

Industry experts said the nation may soon turn into a net importer as demand is far outstripping production.

http://english.sina.com/business/2010/0727/331088.html

[hardnox604008]

I guess they can import some of our moldy corn to blend with theirs....