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Veteran Advisor

From the floor March 15

At the close:

UGLY! That's how many traders described today's market. And there may be more ugliness coming.

--Corn closed at 2 month lows

--Soybeans closed at 3 1/2 month lows

--Wheat hit 7 1/2 month lows

--Soyoil hit 'limit' down

The May corn futures closed limit down (30 cents) at $6.36. The July corn futures contract settled 'limit' down at $6.42 1/2. The May soybean contract closed 'limit' down (70 cents) at $12.70.  The May wheat futures closed 53 cents lower at $6.67 3/4. The May soymeal futures settled $14.70 lower per short ton at $340.80. The May soyoil futures closed down its daily $2.50 limit at $52.88.


In the outside markets, the NYMEX crude oil is $2.68 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 206 points.


I'm seeing a lot of long faces, hearing fights and arguments, and feeling frustration galore. Wow! Panic rules. After hitting its limit down, corn traded 15 cents below that level, synthetically.


Recap: One trader says, "Panic-selling ruled the floor Tuesday. People want to get out of the market, period, regardless of price. I don't think anybody expected this harsh of a pullback. I think Japan's crisis started this fall, but the 'technicals' finished it. By exiting the market, traders are saying they don't want to deal with anymore margin calls and wanted to save some profits. So, you're seeing dumping of long positions.
There are two ways this free-fall will stop. One, if Japan gets complete control of their nuclear plants. If they can get everything under control, that would help. But, what are the chances of that? Or, number two, we're going to get to some technical numbers, somewhere down the line, and someone will step in and start buy corn and soybeans. Whether that buyer is China or whomever. But, we do need to hit those technical levels which are not that far away; 25 cents for corn and 70 cents or so for soybeans. Realistically, that is only one trade session away.
For funds, the only way you reverse their minds on bailing out of this market is a friendly acreage number on March 31. The funds don't have to come back into this market. They can just sit there, they don't need it. So, to reverse the whole trend of the market, you're going to need a friendly acreage number."


Mike

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At 12:55pm:

Electronically, the soybean market hit 'limit' down. It's now down the 70-cent daily limit. So, that brings corn, soyoil and soybeans to 'limit' down levels.

 

Mike

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At 12:30pm:

Corn and Soyoil hit 'limit' down Tuesday.


The May corn futures are limit-down 30 cents at $6.36. The May soybean contract is 63 cents lower at $12.77.  The May wheat futures are 49 3/4 cents lower at $6.71. The May soymeal futures are $14.00 lower per short ton at $341.50. The May soyoil futures are $2.50 lower at $52.88.

In the outside markets, the NYMEX crude oil is $2.64 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 206 points.

News: Cargill sold off its stake in Mosaic, the fertilizer company. Mosaic will now be able to be traded on the S & P 500. Do you think this means that Cargill feels the corn prices have peaked for 2011? Hmmmm.......

Mike

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At mid-session:

The May corn futures are 24 1/2 cents lower at $6.41 1/2. The July corn futures contract is 'limit' down at $6.42 1/2. The May soybean contract is 46 1/2 cents lower at $12.93 1/2.  The May wheat futures are 50 3/4 cents lower at $6.70. The May soymeal futures are $9.80 lower per short ton at $345.70. The May soyoil futures are down the daily $2.50 limit at $52.88.


In the outside markets, the NYMEX crude oil is $2.68 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 206 points.


One analyst says, "Overall there is no real huge change in fundamentals, just a lot of fear out there.  I think the lower we go the better chance end users have to get some cheaper pricing done.  Most planting ideas should be in by now as seed, etc. needs to be ordered.  So my thoughts are the buy side is getting a gift.  We will see if the buyers agree with me soon."


Mike

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At 10:30am:

Corn is trading again, coming off its limit down status.


Mike

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At 10:15am:

Corn hits its 30 cent limit down level, soybeans are 60 cents lower (70 is limit), and wheat is 50 cents lower (60 is limit). Cattle and hog futures dropped to their daily limit lows, as well Tuesday.


The futures pits are relatively quiet, while the corn, soybean options pits are very loud.


Mike

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At 9:45am:

The IAEA, the world's nuclear watchdog, just reported that all of Japan's nuclear units involved in this crisis are now safe and stabilized.


Meanwhile, some corn contracts have hit limit-down, wheat has dropped 40 cents, and soybeans 35 cents. Elsewhere, the CBOE's Volatility Index (VIX) is at its highest level since August 2010. As the stock market falls, the VIX jumps up.


Mike

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At the open:

The May corn futures are 22 1/2 cents lower at $6.43 1/2. The May soybean contract opened 23 cents lower at $13.16.  The May wheat futures opened 30 3/4 cents lower at $6.90. The May soymeal futures opened $5.50 lower per short ton at $350.00. The May soyoil futures opened $0.98 lower at $54.40.


In the outside markets, the NYMEX crude oil is $3.26 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 198 points.


Mike

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At 6:45am:

Early calls: Corn 7-9 cents lower, soybeans 10-12 cents lower and wheat 12-13 cents lower.


Trackers:

Overnight grain markets=Trading lower.

Crude Oil=$3.27 lower.

Dollar=Higher.

Wall Street=Seen lower as Japan's nuclear plant crisis worsens. The International Atomic Energy Agency says high levels of nuclear radioactive material are being released into the atmosphere, due to a fire at the No. 4 reactor. In fact, this Dow Jones Newswire story says rates are so high that a human would get its limit after only seven minutes.  Investors run away from oil and other risky investments and into gold. Commodities are getting hit hard.

World Markets=Sharply lower.


More in a minute,


Mike

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14 Replies
Senior Contributor

Re: From the floor March 15

So does Japan and their troubles fit the description of a 'Black Swan Event'?

 

And what will the final outcome in the markets be?

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Contributor

Re: From the floor March 15

is japan hiding a big desaster????

the next 2 or 3 motnsh we will forget about japan but meanwhile they will hit the markets, including corn and beans

 

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Veteran Advisor

Re: From the floor March 15

Santiago,

 

The feeling on the floor is that Japan's worsening crisis is still a story 'unfolding'. One trader says watch the Dow. The grain markets will follow the Dow today, as a gauge of what investors think of the Japan crisis. Most traders are talking about two things. One, the market is going to be packed with fear until the Japan story becomes more clear.  Also, no one really wants to make any big moves until the March 31 Planting Intentions Report comes out.

 

I'm also hearing a lot of traders saying that the Sep. corn futures contract is getting a lot of attention. I think it's the July/Sep spread that is really seeing the activity.

 

How are things in Argentina? Is the crop made? What size is it Santiago? Today, Oil World estimated the Brazilian soybean crop at 70-71 million metric tons. That is down a bit from some folks thinking 73 mmt.

 

Thanks,

 

Mike

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Senior Advisor

MIKE.....

Were did you get your info on all units being safe..............just heard a blurb that they were going to try and dump water by helicopter on one of the units...............

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Veteran Advisor

Re: MIKE.....

The International Atomic Energy Agency is releasing that information to news sources. I've seen it on Reuters and CNBC. A no-fly zone has been enacted as well. This story is far from over. But, that is the latest.

 

Mike

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Veteran Advisor

Re: From the floor March 15

Canuck_2,

 

Good to hear from you. A floor trader just told me that the Japan situation is causing traders to overdo a move lower, short-term. Funds are exiting, extracting money from these grain and soy markets. Keep in mind, the lower we go, the bigger the March 31 Planting Intentions Report becomes.

 

What say you?

 

Mike

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Senior Advisor

Re: MIKE.....

Must have missed the CNBC blurb............what I heard was a statement that units at ...."enter list here"..........were safe and stable..........BUT they DID NOT include the site with the 4 reactors they have been trying to get under control......................

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Contributor

Re: From the floor March 15

my gues is that 20 to 21 milion tons on corn and 50 mill tons on soybeans in argentina

 

regarding brasil is raining to much these days and we may see some reduction on previous estimations

 

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Senior Contributor

Re: From the floor March 15

" A floor trader just told me that the Japan situation is causing traders to overdue a move lower, short-term."

 

Mike is that overdue or overdo?

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