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Veteran Advisor

From the floor March 3

At the close:

At mid-session, the May corn futures settled 15 1/4 cents higher at $7.36 3/4. The May soybean contract closed 17 3/4 cents higher at $14.12.  The May wheat futures settled 12 1/4 cents higher at $8.23 1/2. The May soymeal futures settled $8.10 higher per short ton at $372.50. The May soyoil futures ended $0.03 lower at $58.77.
In the outside markets, the NYMEX crude oil is $0.33 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 204 points.


One floor trader says, "Good exports. I'm a little concerned about the ethanal grind. 5 weeks in a row of a smaller grind. Some analysts caution of taking the usage down 100 mln.  Good close today, but painted the tape with Moc buying.  I guess they want to test 744 last Sunday nites high."


MIke


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At 1pm:

About today's rally, one analyst says, "I think we have a lot of different things going on today.

First, there are a few logistics issues.  There are river transportation troubles along the Ohio River Valley.  There are some strikes by workers at the Rosario port in Argentina.  The rain in Brazil has slowed harvest.  They are slower than last year in loading out beans.

There are a few weather issues.  The weather in the hard red winter wheat belt is dry (Kansas, OK, TX).  Forecast rain is not much and is farther north than in previous days.  There hasn't been any rain in Argentina for awhile.  This could be a concern for second crop soybeans (first crop saved by rains in Feb).  Plus don't forget the rain in Brazil.

Then there are demand issues.  For example, soybean and corn sales were decent/large.  There seems to be end user pricing on any dips that the market gives us (whether it is a 2-3 day dip or a one hour dip).  Our crops are competitively priced--for example, beans to China from the PNW are competitive with beans from Brazil.  Ethanol blenders are making huge money.
Ethanol producers have seen their margins improve.  There is more discussion regarding increased production of biodiesel--the improvement in energy prices has made this more attractive.  Plus, one way or another, production
must increase to meet the RFS2 mandate.
"

 

Mike

-------

At 11:20am:

 

FWIW on cotton: One analyst says, "Not a lot of new news today - there is a big rain system moving into the eastern Delta/SE this weekend that will bring rains of .50-2.0 inches.  US export shipments again holding up very well with better new crop sales as that is where interest is housed for Q1 2012."

 

Mike

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At mid-session:

The May corn futures 8 3/4 cents higher at $7.30 1/4 The May soybean contract is 13 3/4 cents higher at $14.08.  The May wheat futures are 12 3/4 cents higher at $8.24. The May soymeal futures are $4.80 higher per short ton at $369.20. The May soyoil futures are $0.50 higher at $59.05.


In the outside markets, the NYMEX crude oil is $1.14 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 178 points.

 

Mike

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At the open:

The May corn futures opened 5 1/4 cents higher at $7.26 3/4. The May soybean contract opened 6 cents higher at $14.00 1/4.  The May wheat futures opened 4 cents higher at $8.15 1/4. The May soymeal futures opened $2.90 higher per short ton at $367.30. The May soyoil futures opened $0.37 higher at $59.19.


In the outside markets, the NYMEX crude oil is $0.31 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 149 points.

 

Mike

--------------

At 7:30am:


USDA Weekly Export Sales released Thursday are friendly for corn and soybeans, for sure.

Corn=1.201 million metric tons. The trade expected 800 to 1,100 metric tons (mt).

 

Soybeans=645,300 mt, above trade expectations of 250-450,000 mt.

 

Wheat=650,900 mt, below a trade expectation of 900-1.2 million mt.

 

Soyoil=16,000.

 

Mike

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At 7:15am:

News:

--Japan buys 129,094 metric tons of U.S. wheat Thursday. Export Sales Report is coming up.

--Brazil raises its lending interest rate to 11.75%. This makes that country's products less attractive on the export market. This is also the reason, as I have reported, why Brazilian farmers can't afford to put up on-farm storage.

--On Thursday, the European Central Bank left its benchmark interest rates unchanged at 1%.

--The Argentine port workers went on strike yesterday, at that country's major ports. This might be bullish news for today's bean market, don't you think?

--China’s central government reported sales of 43.3 million tons of wheat and 27.45 million tons of corn from strategic reserves in calendar 2010.
--The wheat crop in India, the world's second largest crop behind China, is expected to hit 83.0 million tons this year, exceeding their record 2010 crop by 2.2 million the U.S. Department of Agriculture attaché in New Delhi said.


Mike

------

At 6:45am:


Early calls: Corn 3-5 cents higher, soybeans 3-5 cents higher and wheat 5-7 cents higher.


Trackers:

Overnight grain markets=Trading higher.

Crude Oil=$0.69 lower.

Dollar=Higher.

Wall Street=After better job market data, the stock market is seen higher today.

World Markets=Higher.


 

More in a minute,


Mike

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1 Reply
Palouser
Senior Advisor

Re: From the floor March 3

Couple of items caught my eye.

 

China selling 43.3 MMT from 'strategic ' reserves is a phenomenal number!!!!! It is positively gigantic!!!!! But, what is the definition of 'strategic reserves'? If my memory serves me the highest inventory China had in 'reserve' in the past (15 years ago?) was around 106 MMT - which is a higher number than the entire production of wheat in North America. China normally has 1/3 of the world's carry over inventory of wheat. Of course, the bottom line is - how much draw down of wheat reserves has taken place year-to-year.

 

As for India's wheat production. The are experiencing an out break of stripe rust in their most productive area, so the final outcome is still in doubt. There have been forecast for Indian exports for more than two years now, and they haven't occurred. Maybe this will be the magic year?

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