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marketeye
Veteran Advisor

From the floor March 11

At the close:

The May corn futures settled 18 1/2 cents lower at $6.64 1/4. The next corn 'support' price is $6.50, analysts say. The May soybean contract closed 21 cents lower at $13.34 1/2, off the days low of $13.04.  The May wheat futures closed 21 3/4 cents lower at $7.18 3/4. The May soymeal futures settled $3.70 lower per short ton at $350.00. The May soyoil futures finished $1.03 lower at $55.90.


In the outside markets, the NYMEX crude oil is $1.87 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 82 points.


Meanwhile, the U.S. Grains Council is reporting Friday that it received initial reports that this morning’s earthquake and subsequent tsunami may have caused significant damage to many of Japan’s agricultural facilities and production areas. While the extent of the damage is not yet known, it will likely impact grain trade, according to a USGC press release. In its statement, ports in northern Japan, Kushiro, Hachinohe, Ishinomaki and Kashima, were hit by the tsunami.


Mike

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At 11:40am:

Quakes and Charts:

One floor trader says, "The earthquake helped push the grain and soybean markets lower Friday. But, technically, the markets were are already crumbling and falling apart. Overall, what we are seeing on the boards, this pullback has a lot to do with technical factors. These markets are poised for some breaks, only because the 'red' lines and 'blue' lines are crossing. We had technical support points in corn that we ran right through, and we had soybean support points we ran right through. Beans are coming back up around $13.50, and that would be a relief if that market stays above that level on the close. If we can't, the selling will take over next next week.
What we fear is that Informa, the private analyst firm, comes out next Friday with a new acreage estimate of 93.0-94.0 million for corn, and maybe even the government on March 31. But, if they come out with a corn number like that, where does that leave the soybean acreage number? That leaves the bean number to be bullish. The charts don't know that, so we are lower. But, you can't have a 93.0-94.0 corn number and a 78.0-79.00 acre bean number. That just won't work," he says.


Mike

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At mid-session:

The May corn futures are 9 1/4 cents lower at $6.73 1/2. The May soybean contract is 10 1/4 cents lower at $13.44 3/4.  The May wheat futures are 7 3/4 cents lower at $7.32 3/4. The May soymeal futures are $0.40 higher per short ton at $354.10. The May soyoil futures are $0.85 lower at $56.08.


In the outside markets, the NYMEX crude oil is $2.00 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 21 points.


One analyst says, "When the quake hit last night, grains broke as 70% of our exportable feed grains go to Asian markets. Specifically, Japan imports 17 million metric tons of U.S. feedgrains annually. The initial reaction is bearish, as U.S. grain exports will slow as Japan's shipping ports and roads are wrecked. But, at some point, it turns bullish as Japan will need more grain than ever to replace what was lost in on port storage and inland farm lands."


Mike

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At the open:

The May corn futures are 15 1/4 cents lower at $6.67 1/2. The May soybean contract opened 26 3/4 cents lower at $13.28 3/4.  The May wheat futures opened 22 1/2 cents lower at $7.18. The May soymeal futures opened $3.20 lower per short ton at $350.50. The May soyoil futures opened $1.03 lower at $55.90.


In the outside markets, the NYMEX crude oil is $2.27 per barrel lower, the dollar is lower, and the Dow Jones Industrials are down 17 points.


Mike

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At 7:15am:

There are a whole host of reasons given for this grain and soybean price pullback:

--Brazil's Conab released higher 2010-11 grain & oilseed production estimates: 154.2 million metric tons vs. 149.2 last year and 149.4 in January.

--Based on a lot of world evenys, the market is in a panic this morning.

--Russia's drought is easing.

--U.S. wheat weather concerns may be fading.

--Due to concerns the global economic recovery is seen as slowing, consumer buying may be curbed.

--More financial tightening in China is being talked about, as that country fights inflationary measures.

--China reportedly is sitting on large mounds of soymeal and soyoil, due to a slowing crush.


What do you think the reason is for the five-day drop in prices?


Mike

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At 6:15am:

Early calls: Corn 12-14 cents lower, soybeans 25-28 cents lower and wheat 24-25 cents lower.


Trackers:

Overnight grain markets=Trading sharply lower.

Crude Oil=$2.76 lower.

Dollar=Higher.

Wall Street=Seen lower, following a huge earthquake in Japan (59 reported dead) and warnings of a tsunami for Hawaii, the U.S. West Coast and 19 other countries. Plus, unrest is rising in Saudia Arabia.

World Markets=Lower.


Three words to describe this morning's trade: Look Out Below!


More in a minute,


Mike

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6 Replies
Artifice
Senior Contributor

Re: From the floor March 11

why a pull back?

 

a crazed spec bubble is melting.

 

US WX improved? march Wx is meaaningless to 2011 C and S potential.

 

weather reverts to the mean.

 

if russia has a drought, next up, return to normal.

 

excess bullishnes, creates artifically.

 

artifice

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Mike M2692830
Senior Contributor

Re: From the floor March 11

I figured this pullback, correction or whatever you want to call it was due and you can attach any excuse to it...MikeM

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marketeye
Veteran Advisor

Re: From the floor March 11

I forgot to mention these guys, as culprits of the price retreat. Click to see the answer.

Funds.jpg
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p-oed Farmer
Senior Contributor

Re: From the floor March 11

Market was a little overbought...... The market needed this wash out...... Lots of grain came to market when it hit 7.00.... (Weaker basis).... Lots of buying power now sitting on the sidelines...... Not so sure that the farmer will be there to fill the sell side of the next time the funds want to buy...... p-oed

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Red Steele
Veteran Advisor

Re: From the floor March 11

isn't this the biggest pullback in months?

 

Not sure if the highs are in or not, but to go on to new highs, a correction of probably a bit more than we have seen so far would be needed. Not too many markets ever go straight up.

 

Lots of weather to play out over the next six months. and also "quantitative easing". If big Ben starts or stops the printing presses of dead presidents, this will undoubtably move the grain markets, too.

 

The federal crop insurance program is giving us a gift...the ability to lock in $6 new crop corn and $13.50 beans, and I am going to probably shake the shekels out of my pockets and buy the cadillac program for  $26 an acre and insure the 85% level with RP fall protection now. This pullback may end up being a blessing to me, as I would not have done that otherwise.

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Jim Meade / Iowa City
Senior Advisor

Re: From the floor March 11

These are old stomping grounds.  In 1963-4 I was stationed at an Army unit on Misawa Air Force Base, northern Honshu.  Once in a while a group of us would hire a taxi and drive down to Hachinohe and close up a few bars about sunrise.  Once, I rode back to base in the third class car of the train.  A bunch of old Japanese women with chickens, goats and me.  I don't know which smelled worst.  There were bars in Hachinohe that still sold absynthe (I( didn't drink any).  I remember going along the harbor and seeing them building ocean going fishing boats of wood.  I hope it wasn't hurt too bad.  I went through some little quakes but of course nothing remotely like this.

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