From the floor July 28

[marketeye]

At the close:

The Dec corn futures closed 13 3/4 cents higher at $3.90 3/4. The Nov. soybean contract ended 12 1/2 cents higher at $9.78. The Sep. wheat futures settled 20 1/2 cents higher at $6.15 1/2. Dec. soybean meal futures closed $5.90 higher at $284.50 per short ton. Dec. soyoil futures closed 28 points higher at 39.57.

In the outside markets, the NYMEX crude oil is $0.53 lower per barrel, the dollar is lower, and the Dow Jones Industrials are down 36 points.

Mike

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At 1pm:

One analyst says this rally is mostly about Russia's wheat production problems. "In part Russian, but the European Union nations which comprise of 27 grain producing nations too are in the grips of drought like conditions and this collectively has wheat shorts bailing and specs buying corn and beans in follow through."

Mike

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At mid-session:

At mid-session, the Dec corn futures are 14 cents higher at $3.91. The Nov. soybean contract is 14 cents higher at $9.79 1/2. The Sep. wheat futures are 24 cents higher at $6.19. Dec. soybean meal futures are $5.90 higher at $284.20 per short ton. Dec. soyoil futures are trading 22 points higher at 39.51.

In the outside markets, the NYMEX crude oil is $0.60 lower per barrel, the dollar is lower, and the Dow Jones Industrials are down 14 points.

Traders say wheat is leading a sharp rally this morning. Due to a drought in the Black Sea region, the question becomes will this shift business to the U.S.?

Mike

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At 9:53am:

Market Talk: Is Iowa choking on corn, not needing it like many analysts talk about when discussing the U.S. headed for tight corn ending stocks? Here's what leads me to this thought. A contact in southern Iowa is reporting that an ethanol plant is not receiving any spot corn deliveries in the month of August. Why? The plant is chuck-full of corn. Does this signal a massive glut of spot deliveries? This runs counter to the talk of the U.S. needing a record crop due to possible tight corn stocks. Is there too much corn out there? Add this to the fact that the U.S. corn still in the field looks to be harvested at above-normal yields, for many. This is not an attempt to write something bearish, I'm just trying to get a feel for a situation that not many are talking about, too much corn? What say you?

Mike

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At the open:

At the open, the Dec corn futures are 6 1/2 cents higher at $3.82 3/4. The Nov. soybean contract is 7 1/2 cents higher at $9.73. The Sep. wheat futures are 15 1/2 cents higher at $6.10 1/2. Dec. soybean meal futures are $3.70 higher at $282.00 per short ton. Dec. soyoil futures are trading 10 points higher at 38.66.

In the outside markets, the NYMEX crude oil is $0.82 lower per barrel, the dollar is lower, and the Dow Jones Industrials are down 27 points.

Mike

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At 9:20am:

USDA announced Wednesday China bought 120,000 metric tons of U.S. soybeans for 2010-11 delivery.

Mike

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At 6:55am:

Early calls: Corn up 2-4 cents, soybeans up 3-5 cents, and wheat up 8-10 cents. Russia is believed to eventually halt exports of grain for feed-quality. I was told most of their wheat is just feed quality. So, this should be interesting. Regardless, the markets are factoring in world crop-weather concerns, mainly in Europe and Russia.

Trackers:

Overnight grain=Trading higher.

Crude oil=Trading $0.13 per barrel lower.

Dollar=Trading lower.

Wall Street= Seen opening flat ahead of more earnings reports.

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

More in a minute,

Mike

[Palouser]

Who'd have thunk - with the world 'awash' in wheat. Someone must have overturned the laws of physics, eh?

Oh yeah, I know, things change. But I'd be interested in throwing current events back to traders who used the term 'awash' and ask them to define that term now.

[redrotor]

I would think the important number is how much corn they are using , not storing . If they bought ahead, it might be they thought it was cheap and going higher. Or as we've seen, etol plants can make mistakes too.

[p-oed Farmer]

Mike..... Talking about one e-plant in IA falls under  the back-yarditis syndrome that farmers have all of the time...... One can not draw any conclusions from what is going on in one location....... p-oed

[SouthWestOhio]

Mike, it sounds like the buyer at that plant made some excellent decisions when prices were lower.

[p-oed Farmer]

Good point SW...... p-oed

[marketeye]

p-oed, I agree. I bring it up to see if we can get any widespread clarification of the issue. It would be interesting to see if others across the Corn Belt are seeing elevators, ethanol plants, or their other regular buyers holding off on purchases. If they are not seeing this, well that is an answer as well. Quite the rally today, huh? Wheat doees have the ability to stage rallies!

Thanks,

Mike

[bendohrman]

In central mo, we have seen not only ethanol plants full but also feed mills that are no bid/full till september.  Plenty of old corn to go around these summer month.

[RichILL]

Palouser, as I recall during the last big runup in wheat you mentioned the wheat market goes from feast to famine, first overproducing and then underproducing relative to demand.  I think you also said during the price break following the runup wheat would start another upswing due to an event such as drought in Europe or Russia.  If my memory is correct all I'll say is "Good call!"  The drop in prices reduced wheat plantings across the globe and a drought event has ensued. 

[Palouser]

More specifically, my general take is that the futures market, because it is not firmly connected to the physical market, cannot signal when production should increase to maintain stability. It does a good job of going berserk when it's too late to do anything. Likewise, it can't grasp the notion of 'normal production variability' (I should patent that phrase) and the associated risk. This is cast in stone and there is no grounds for argument on these points. The last 5 years proves it beyond any conceivable doubt.

Now the CFTC and CME have come up with non free market games like Variable Storage Rates (VSR) to force convergence - and they probably will announce soon that the problem is solved. NOT! What they cannot get through their fossilized frame of reference, limited as it is, is that the whole set up is a sham. Futures are largely irrelevant to the physical market and only follow it to the degree because so many people believe in a reality that doesn't exist because they can't bear the reality of actual free markets and futures connected to physical as theory and intent have long dictated. They are too insecure to admit their 'world' is still in the realm of the emperor's clothes.

I had really hoped for reform from this administration, but they blew it royally. Beyond that there isn't any realistic chance of reform. The current CFTC chairman is weak and ineffective and subservient to the other larger regulatory agencies who are busy enlarging their turf and could care less about grain commodity futures trading. Just not sexy enough.

I believe they could create a 'golden goose'. They think the buzzard they have a hold of is one. Traders are but one victim. Producers are always going to be the odd one out. We have to listen to traders tell us how much good they do us. The delusion is a grand one.