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Veteran Advisor

From the floor May 24

After the close:
 U.S. corn planting is 93% complete, 71% good/excellent,  71% of the corn crop has emerged, USDA says.
   For soybeans, 53% of the U.S. crop is planted, 24% of the soybean crop has emerged.   In the past week, Illinois and Indiana farmers made significant advances in soybean planting vs. a year ago. Iowa farmers are just slightly ahead of their year ago pace. Meanwhile, the states of Michigan, Minnesota, Nebraska and Wisconsin used this past week’s warm/dry weather to move them over half-done with soybean plantings.
   
U.S. winter wheat crop at 9% very poor-poor, 25% fair, and 66% good/excellent. Also, 63% of the crop is headed, below 66% a year ago, and a 68% five-year average. The U.S. spring wheat is 91% planted. USDA estimates that 60% of the U.S. cotton crop has been planted.
Mike
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At the close:
The July corn futures settled 2 cents higher at $3.71.  The July soybean futures contract closed 1/2 of a cent lower at $9.40 1/2 per bushel. The July wheat futures ended 4 1/2 cents lower at $4.64 1/2. July soybean meal futures settled $1.90 lower at $273.70 per short ton. The July soyoil futures settled 56 points higher at $37.52.

In the outside markets, the NYMEX crude oil is $0.16 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 54 points.
One analyst says the trading was really a mixed bag Monday. High expectations for the Crop Progress report this afternoon put pressure on the markets. The higher crude oil market supported the grains. The higher dollar weighed the grains down. Overall, demand is supportive. And ultimately, the hot/dry Midwest weather is negative for the markets. So, there was two-sided trading. All grain commodities finished opposite how they opened.
And here is your Wheat Options Talk: One trader says, "The July 540 call/480 put combo was featured early and often on Monday, with paper buying the calls, selling the puts and collecting 19 and 20 cents as underlying wheat languished for much of the day near unchanged.  Trade was painfully quiet, with outside action concerning Europe starting to have little impact, or at least not the kind that you'd think, on our markets. Grains were all higher for much of the day, even as the dollar screamed.  It seems that logic and educated guesses aren't any more effective than shots in the dark at this point.  Wheat options implied volatility has become too cheap to step out and sell but not predictable enough to take any sort of directional stand."
Mike
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At mid-session:
The July corn futures are 2 3/4 cents higher at $3.71 1/4, Dec. corn is up 4 1/4 cents at $3.89 1/2.  The July soybean futures contract is 3 1/4 cents higher at $9.44 1/2 per bushel. The July wheat futures are 1/4 of a cent higher at $4.72 1/2. July soybean meal futures are $0.30 higher at $275.90 per short ton. The July soyoil futures are 43 points higher at $37.39.

In the outside markets, the NYMEX crude oil is $0.12 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 28 points.
One trader says the fact is that crude oil can't go down $2.00 everyday. So, there will be some higher days, maybe this is one of them. It's weird to see crude up along with the dollar, because they have been decoupling. Nonetheless, this is providing support for the grains.
Mike
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At 10am:
Earlier this morning I posted my 'confusing stat of the day'. It come from China, regarding their all-time high corn stocks. Huh? Why import then is my question. You can see it below. So, I'm looking for answers to clear up my confusion.
Simply put, one trader says, "Watch what China does, not what they say." Yet another trader says, "The simple answer is that they (Chinese) are probably lying… you can do that in a communist country. The other thing is that grain production is primarily in the North and Northeast areas of the country and most of the consumption is coastal and in the south… it's often easier to import than to move in-country."
What say you?
Mike
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At 9:50am:
Building weather premium into this market. One analyst says, "We are set up to build a weather premium in the market price higher, reflecting the weather uncertainty as we head into June and July until key yield development time passes, but be ready for a weather worst –case scenario.  Don’t be caught by surprise if this is a drought year and you are not positioned.  The ground work is now laid and June 1 kicks off the growing season. July corn has major support at 3.54 and resistance at 3.88. July beans have support at 9.30 and resistance at 9.50 Monday and Tuesday .A close over resistance and 9.76 is next stop. July wheat support remains 4.60 with trend line resistance at 5.04," he says.
Mike
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At the open:
The July corn futures opened 1/2 of a cent lower at $3.68 1/2, Dec. corn is 1/4 of a cent lower at $3.85.  The July soybean futures contract opened 5 1/2 cents higher at $9.44 1/2 per bushel. The July wheat futures opened 1 1/2 cents lower at $4.70 1/2. July soybean meal futures opened $2.70 higher at $278.30 per short ton. The July soyoil futures opened 12 points higher at $37.08.

In the outside markets, the NYMEX crude oil is $0.32 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 32 points.
The open out-cry trading is following the overnight markets. One analyst says, "Mixed bag of influence. Capping gains in corn is expectations for tonight's crop progress report. It is expected to show 93% of the corn is now planted and a warm sunny drier week ahead to assist good emergence and condition ratings. But, support early comes from talk of strong demand and cash bids at terminals. Beans lead the way higher as traders trade more talk of Chinese bean purchases recently. This may just be the tip of the iceberg with talk of U.S. beans having a value over Brazil right now. In addition, China continues to boycott Argentine beans and soyoil. Additionally, some traders see this afternoon's crop progress report showing bean planting moved under the 5 year average pace due to last week's heavy rains. Missouri is furthest behind in bean planting and had another 3 inches late last week."
Mike
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At 7:45am:
This afternoon's USDA Planting Progress report is expected to show: corn g/exc rating up by 1-3%, soybeans 60% planted.
Here's the confusing stat of the day: Over the weekend, China's central government reported that their corn stocks are at all-time high levels. Just 1/3 of its stocks are needed to meet local demand. Huh? Why are they having to buy U.S. corn? Can someone explain this to me?
Speaking of corn, some of the very first of this year's crop planted in Louisiana is a week away from tasseling. My contact in the bayou says the crop has been very dry and yield potential is low, at this point.
Mike
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At 6:30am:
Early calls: Corn down 1-2 cents, soybeans up 2-4 cents, and wheat down 1-2 cents. 
Trackers:
Overnight grain=Trading mostly lower.
Crude oil=Trading $0.20 per barrel lower.
U.S. Dollar=Trading higher as the euro weakens.
World Markets=Mixed.

Wall Street=Seen opening lower as a bailout for a Spain bank weighs on the European debt crisis. Germany's market is not open today. Also, a lot of economic reports will be released this week for investors to eye.

 

More in a minute,

 

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