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Veteran Advisor

From the floor May 5

At the close:

The July corn futures settled 20 3/4 cents lower at $7.08 3/4. The July soybean contract settled 30 1/4 cents lower at $13.21 3/4. The July wheat futures closed 18 cents lower at $7.54. The July soybean meal futures closed $5.00 per short ton lower at $347.50. The July soyoil futures settled $1.44 lower at $55.73.


In the outside markets, the NYMEX crude oil is $8.29 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 72 points.

 

Mike

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At mid-session:

The July corn futures are 18 cents lower at $7.11 1/2. The July soybean contract is 34 cents lower at $13.17 3/4. The July wheat futures are 18 cents lower at $7.54. The July soybean meal futures are $6.00 per short ton lower at $346.50. The July soyoil futures are $1.67 lower at $55.50.


In the outside markets, the NYMEX crude oil is $6.29 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 27 points.

One corn pit trader says, "We filled the gap in corn at $7.01 1/4, something we have been preaching all week. So, now we'll see if this sell-off has any legs to it. Informa, a private analyst firm, will release new acreage numbers tomorrow. We'll see if they are believable. Otherwise, the outside markets are going against us. The wheat market, with plenty supplied worldwide, is in the worst shape. We may be $2.00 overpriced on wheat. And soybeans don't have a bullish story either, with any acreage shifts meaning more bean acres."

 

Yet another analyst says, "Export sales were poor, but this has much more to do with macros than anything else.  Specs of all kinds and including funds are liquidating longs, in part based on macroeconomic news of a potential slow down in the recovery, and in part for margin call reasons.  The export sales were not any good, but that is just throwing gas on the fire.  The selling is across the broad range of commodities and not just confined to grains or even just the nearby grains, so you have to look farther afield for reasons to tank.  Futures have now either exceeded or at least come very close to some initial projections for me for the down move, so it is possible that we will bounce out of here.  We will see about that!"

 

Mike

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At 10:15am:

Corn is down 28 cents, soybeans are down 41 cents, and wheat down 18.

 

Apparently, it's another broad commodities sell-off day. Everything is getting hammered. So, invstors are lightening up on commodities, but where are they going? Or, are they just going to the sidelines? Do you think corn is overvalued at $7.00?

 

One corn pit trader says, "May go to 'limit' down, but doesn't have to if we go back above $7.15. It could rally hard too. After today, charts need re-examined.

 

Mike

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At the open:

The July corn futures opened 17 1/2 cents lower at $7.12. The July soybean contract opened 24 cents lower at $13.26. The July wheat futures opened 9 1/2 cents lower at $7.62 1/4. The July soybean meal futures opened $4.50 per short ton lower at $348.50. The July soyoil futures are $1.39 lower at $55.78.


In the outside markets, the NYMEX crude oil is $4.33 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 82 points.

 

Wow! This market is tanking this morning.

 

Mike

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At 9:25am:

Interesting morning with the roundtable discussion. Thanks for all that joined us. I hope you found it useful information. It sounded to me like more rain is headed for the Midwest in May.  By the way, we will offer the program on a recorded basis, for those that missed it this morning.

 

Mike

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At 5:45am:

Early calls: Corn 3-5 cents lower, soybeans 7-9 cents lower and wheat 1-2 cents higher.


Trackers:

Overnight grain, soybean markets=Trading mostly lower.

Crude Oil=$2.57 lower.

Dollar=Lower.

Wall Street=Seen trading lower as investors await a report showing same-store sales. Also, GM reports earnings Thursday and the European Central Bank is meeting.

World Markets=Lower.

 

REMINDER: I do hope you can join us this morning for a 'livestreaming' event to discuss the issues of this delayed planting season. When the USDA releases its Crop Progress Report next Monday, corn planting is expected to range between 20%-22%. Way behind 5-year averages. The video program will start at 7:45am right here in Marketing Talk. Feel free to post questions and we'll have the panelist answer them.

 

More in a minute,

 

Mike

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10 Replies
Senior Advisor

Re: From the floor May 5

What happened to the cotton market---where there bales hiding somewhere--Smiley Very Happy-

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Senior Contributor

Re: From the floor May 5

Hey, everybody...Marketeye's all cleaned up this morning and in front of the camera getting ready to kick off this morning's Roundtable over at the CME. Click here to watch the video live!

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Veteran Advisor

Re: From the floor May 5

I would be very surprised if the planting number for corn isn't closer to the 30-35% range.  I really expect IA to be close to 70%  planted by the weekend, if the weather holds, and guys quit adding to their corn acres.

 

Most farmers spent profits over the last few years upgrading planters again.  It is amazing to watch how quick the crop goes into the ground.  Are we over capitalized for a couple of weeks of planting? Yes, but with today's weather patterns there really is no other choice.  Iowa was fortunate to have a dry early April and had fertilizer mostly done.  So when the planting window opened, it was hammer down . Light showers will slow guys down for a few hours today.  So if that is all we get for the week, look for a big number out of IA on Monday. 

 

The effects of the flooded areas have to be accounted for, but in 2010 IA lost huge acres to flooding, and we still produced a national average of third all time yield.  The worse part is those guys that take the flood and their land is covered with sand and crap after the water the leaves.   While the northern belt is going well, the effects of the weather on the crop in the south and east is great enough to support the market for some time.  But this planting window hopefully will end the talk of panic rules for rationing(changing ethanol mandates, etc) that have been in the rumor mill.

 

I still believe if we are to have any rally to break thru the highs it will take a summer rally off of dry weather.  The lowering of crude prices the last couple of days is important, because the consumer can take no more.  Looks like there has been some hoarding going on, big supplies of meat, sugar, copper, silver and other commodities that have seen big price jumps. 

 

For all those sitting with wet fields, I did not post this to ignore or make less of the seriousness of your problems.  Those 'character' building years can be tough.   It still may be that year in IA, but for now we are one step closer to the bin and with insurance levels the way they are, planted means a good floor on income.

 

 

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Veteran Advisor

Re: From the floor May 5

China has a big supply, I guess. I'll do some checking.

 

Mike

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Veteran Advisor

Re: From the floor May 5

From what I am hearing, IA's corn acreage will be big.  Of course, that means bean acres will be down...so I suppose that will balance out some shifting that will happen in southern and eastern regions.  So I would not look for the bean acreage to grow as much as some are suggesting.  Plus, I think IA has the higher bean yield, so acre shift will be to less yielding areas.

 

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Veteran Contributor

Re: From the floor May 5

Dangerous to make predictions based on looking out your own window. You could  be so wrong that embarrassment might keep you from ever posting again.

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Re: From the floor May 5

Hasn't stopped me.

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Senior Contributor

Re: From the floor May 5

I'd venture to guess a huge chunk of Nebraska will have been planted by the time the next planting progress report comes out.  Plus, most of it will have been planted before the 10th which is what UNL says is the magic date before we start to see optimum yield go down.  I've always kind of wondered what they mean by optimum yield?  Last year, the guys that had whole farm averages of 240+ didn't plant a kernel until after the 15th of May.  The guys that planted in April had on farm averages well south of 240. 

 

While I have no doubt we're going to repeat 2008 in terms bursting the huge commodity bubble, I highly doubt that we're witnessing it today.  It's likely that the bubble won't burst until at least July, and it might be a month or so later than that.  Most of the news sources are reporting today's downturn being caused by the dollar going over a point higher.  However, I don't recall seeing crude oil go up 10 bucks or more when the dollar falls a point or more.  Considering the shellacking the outside markets are taking today, I thought the ag. markets held up quite well. 

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Veteran Advisor

Re: From the floor May 5

Gored don't tell MIA farmer but we may hit over 7 0% planted in Iowa by next report. I am done except for a field of hay that I am going to cut before planting to silage corn. Sprayer should be going full bore tomorrow.

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