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Veteran Advisor

From the floor March 9

At the close:

The May corn futures settled 4 1/2 cents lower at $7.01. The May soybean contract closed 33 cents lower at $13.49.  The May wheat futures settled 21 1/2 cents lower at $7.58 1/2. The May soymeal futures settled $7.50 lower per short ton at $352.90. The May soyoil futures closed $1.36 lower at $57.12.


In the outside markets, the NYMEX crude oil is $1.02 per barrel lower, the dollar is lower, and the Dow Jones Industrials are down 1 point.


More market reaction to this weaker trade Wednesday. One analyst says, "Defensive posturing in wheat and soybeans continue in front to tomorrow's USDA report. Expectation for increased soybean production world wide (South America) and conformation of adequate world wheat supplies are keeping those two commodities on the defensive. As for corn - expect a confirmation of tight stocks.

 

Meanwhile, traders say the funds are selling their long positions in corn, soybeans and wheat. And it's not just a move ahead of the report Thursday. No, they are trimming the 'fat' because their psychology is changing. The funds are saying, okay, we've overpriced, overbought, over everything this 2010 crop, and now it's all about the new crop. Well, that new crop isn't in the ground and not even spelled out yet. So, the funds are pulling back.

 

Technically Speaking

For corn, the charts say that if the May contract drops below the $6.90 level, tomorrow or Friday, that is a major trendline that triggers a next point of support at $6.68, then $6.50 then $6.38. If that $6.90 level isn't breached, we could be headed back up to new highs. The corn price run started at $5.40 and has been as high as $7.44, one trader says.

 

For the May soybean futures contract, if a closing price of $13.55 is hit in the next few days, that sets up $13.25 as the next support point, then $13.05 then $12.75.

 

Mike

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Mike

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At mid-session:

The May corn futures are 9 1/2 cents lower at $6.96. The May soybean contract is 22 1/4 cents lower at $13.59 3/4.  The May wheat futures are 21 1/4 cents lower at $7.58 1/2. The May soymeal futures are $5.30 lower per short ton at $355.10. The May soyoil futures are $0.93 lower at $57.55.


In the outside markets, the NYMEX crude oil is $0.19 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 25 points.


One analyst says, "After a higher overnight and higher day open, funds were sellers and that was a surprise. But, they don't fear Thursday's crop report, with the pre-report estimates being conservative. So, we're seeing continuation of a
bigger pre-planting growing season correction. That mindset could change for the next report the March 31 Planting Intention Report which should be feared to be bullish."

 

Mike

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10am:

In early trading, the May corn futures are 1 1/2 cents lower at $7.04. The May soybean contract is 8 cents lower at $13.74.  The May wheat futures are 1 3/4 cents higher at $7.81 1/2. The May soymeal futures are $2.00 lower per short ton at $358.40. The May soyoil futures are $0.36 lower at $58.12.


In the outside markets, the NYMEX crude oil is $0.37 per barrel higher, the dollar is lower, and the Dow Jones Industrials are down 12 points.

 

Mike

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At 6:45am:

--USDA's attache is saying China will import a record 58.0 million metric tons of soybeans in 2011-12. According to a Dow Jones newswire story, China's demand for vegoil is out of sight.

--Japan seeks 200,000 metric tons of feed barley.

--On China's Dalian Exchange Wednesday, the grain and soybean markets closed lower.

--It's raining cats and dogs in Chicago, this morning. And the fog is thick.

 

Mike

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At 6:30am:

Early calls: Corn 2-4 cents higher, soybeans 1-2 cents lower and wheat 5-7 cents higher.


Trackers:

Overnight grain markets=Trading mixed.

Crude Oil=$0.14 lower.

Dollar=Lower.

Wall Street=Seen flat as it marks the second anniversary of a bull market. The last two years of gains have been the biggest in 80 years.

World Markets=Higher.




More in a minute,


Mike

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4 Replies
SouthWestOhio
Senior Contributor

Re: From the floor March 9

Your comment 'and the fog is thick' made me chuckle. I have a feeling the fog is not only outside but will hang over the trading floor most of today. The thickest fog will be caused by analysts trying to guess what tomorrow's USDA report will bring. With corn having touched under $7 this week how many will be lured back in before the fog clears tomorrow with the reports release? I expect there will be a strong run up today which may be a sell the rumor signal for some of us. Of course there is always the clear skies of tomorrow when we can buy the facts. Smiley Wink

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jec22
Veteran Advisor

Re: From the floor March 9

Des Moines TV station ran a story on the increase usage of E85 in Iowa.  Up 40% from last year.  With the run up in gas prices, usage is jumping again.  So the demand cut will have to come from somewhere else until crude settles down.  Is it correct that there is no blenders credit on E85?  Story said 49,000 jobs in Iowa related to ethanol. 

One other note, does no one use the CCC for grain loans anymore?  Wow, grain under loan outstanding a very well below average levels for this time of year and twenty five percent below last year's lower numbers.

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SouthWestOhio
Senior Contributor

Re: From the floor March 9

jec22 I wonder if that is another indication there is not much in storage.

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jcf97
Frequent Contributor

Re: From the floor March 9

Question... will the funds jump back in and take this thing back up or is it all done.  What has changed as far as wheat??  Some showers in the plains but I read that they were somewhat dissapointing amounts.  I will admit that I am frustrated because I didnt price enough old crop and new crop a few weeks ago and the last 3 days have been down hard.

Smiley Sad

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