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marketeye
Veteran Advisor

From the floor March 7

At 12:50pm:

Every market is down double-digits.

 

One analyst is saying, "After posting handsome highes on the Sunday overnight trade off higher crude and talk of exports over the weekend in corn, beans and wheat profit taking entered as profitable longs took profits and cut risk prior Thursday's USDA Crop Report. Tuesday should see speculators buying, expecting a friendly crop repor. So, a lot of positioning and posturing prior the reports release."

 

Mike

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At mid-session:

The May corn futures are 14 1/2 cents lower at $7.13 1/2. The May soybean contract is 28 cents lower at $13.86.  The May wheat futures are 24 1/2 cents lower at $8.08. The May soymeal futures are $7.20 lower per short ton at $362.50. The May soyoil futures are $0.73 lower at $58.75.


In the outside markets, the NYMEX crude oil is $0.71 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 80 points.


One analyst says the grain markets are following the stock market more than the energies. The result is negative.
"The general shift of big fund traders going away from ag markets towards energy is pushing the grains lower. There is a concern the ag's have been overbought and energy price spikes will impact consumer spending power, resulting in a slowdown of global growth," Roggensack says. "Pressure for agricultural markets will feel these factors.'
In addition, there is a lot of concern about the March 11, 2011, protests scheduled in Saudia Arabia. "The Day of Rage" has the market very nervous, this week, he says.
Other market factors that traders consider to be bearish are the rains in Argentina, the end of the Argentine port strikes, and the ability of Argentine exporters to move crops."


Mike

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


At the open:

The May corn futures opened 1 1/4 cents lower at $7.27. The May soybean contract opened 4 1/2 cents lower at $14.09 3/4.  The May wheat futures opened 10 cents lower at $8.22 1/2. The May soymeal futures opened $0.60 lower per short ton at $369.10. The May soyoil futures opened $0.60 lower at $59.43.


In the outside markets, the NYMEX crude oil is $1.19 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 30 points.


Considering the BSE case in Canada, the cattle futures market is only down a nickel.


Mike

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

At 8:45am:

USDA reports Monday that private exporters sold 150,000 metric tons of corn for delivery to Mexico. Of the total 30,000 tons is for delivery in 2010/2011 marketing year and 120,000 tons is for delivery during the 2011/2012 marketing year.


Mike

-----

At 6:30am:


Early calls: Corn 1-2 cents higher, soybeans 2-3 cents higher and wheat 1-2 cents lower.


Trackers:

Overnight grain markets=Trading slightly higher.

Crude Oil=$2.04 higher.

Dollar=Lower.

Wall Street=Seen higher as crude oil trades over $106.00 per barrel. The U.S. economic calendar is light.

World Markets=Asia/Pacific is lower, Europe stocks higher.

 

Note: I found it interesting that the chairman of Cofco Group, one the big Chinese grain buyers, was quoted, yesterday, in a Dow Jones Newswire story. He said, "Companies will not import corn at current prices." He also said, "We have sufficient corn stocks at the moment."

 

What do you think, is this a head fake?



More in a minute,


Mike

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7 Replies
marketeye
Veteran Advisor

Re: From the floor March 7

Wheat flies off the shelf Monday:

--Lebanon buys 22,500 metric tons of U.S., Moldova soft wheat.

--Iraq buys 300,000 metric tons of U.S. wheat and 100,000 of Australia wheat.

 

Mike

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jrsiajdranch
Veteran Advisor

Re: From the floor March 7

Good morning Mike,  No this is not a head fake. They are gonna import at higher prices!HE HE

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jec22
Veteran Advisor

Re: From the floor March 7

I don't know what China is really saying.  But note, he said they have enough corn for the moment.  Not for the month, not for the quarter, not for the year.

 

We have energy prices charging higher.  Interest rates should be the next shoe to drop.  Not because of consumer demand, but because of government debt....and the problems with the need to sell so many bonds from now until what seems like forever. 

 

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Jim Meade / Iowa City
Senior Advisor

Re: From the floor March 7

""We have sufficient corn stocks at the moment.""

 

Did he say this in English or Chinese, and if in English, how good is his English?  I wouldn't put too much stock in parsing the nuances of isolated comments.  Translation can be a tricky business and, as several of  you have implied, culture can be a component of communication.

 

My take on it?  I don't have a clue.  I sell into the big market and don't worry very much about the details.  If I ever get the big picture right, I'll start trying to get the details figured out.

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marketeye
Veteran Advisor

Re: From the floor March 7

Jim,

 

I agree, translation can be tricky. Boy, did I find that out in Brazil.

 

I just talked to a well respected Chicago brokerage firm. The head guy just told me that corn is in a rationing mode and the soyoil market is next. As far as these rising markets, he says the hammer is in the hands of China and the U.S. government. First, he says we have to see a 'blow off top' on this corn market. And, with all that has happened in the cotton market, he sees wheat being th next market running up. Going forward, he says, "We have more chaotic markets ahead. You haven't seen anything yet!"

 

Mike

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Jim Meade / Iowa City
Senior Advisor

Re: From the floor March 7

Mike,

Chaos seems to be the order of the day.

I still have some corn and beans to sell.  The corn I'm not to eager to get rid of, though I've been selling a load at a time for cash flow, but the beans I just don't know about.  I have some sold for 14.14 April delivery.  Should I sell the rest now, hold it for river open, or hold it till in the summer?  I don't like to hld it a long time in warm weather.  I just don't know.

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dapper7
Senior Contributor

Re: From the floor March 7

jim keep your beans. dont think sa is all its cracked up to be.

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