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marketeye
Senior Contributor

From the floor November 10

At the close:

The Dec corn futures settled 9 1/2 cents lower at $5.66 3/4. The Jan. soybean contract closed 9 1/2 cents lower at $13.19 1/2. The Dec. wheat futures finished 11 3/4 cents lower at $7.10.  The Dec. soymeal futures contract settled $6.40 lower at $360.10 per short ton. The Dec. soyoil futures contract closed $0.55 higher at $53.95.

 

In the outside markets, the NYMEX crude oil is $1.01 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 1 point.

 

Note: The funds sold 10,000 corn futures contracts Wednesday.

 

One trader says that outside of the 'roll', this market will be choppy until the first of the year. He admits that you should watch out for the 'roll'. But, he's pondering whether to even be active until next year. And he's the second trader, today, that has told me this market is not going very far for awhile.

 

Mike

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At 12:30pm:

Everything is down a dime or more.

 

For the record:


CME Group had record trade volume yesterday. The Exchange announced Wednesday:

VOLUME
Corn Futures – 762,387 (Previous record 570,038 set 10/11/2010)
Soybean Meal Futures – 111,881 (Previous record 105,261 set 3/31/2010)
Soybean Options – 124,375 (Previous record 100,503 set 10/11/2010)

OPEN INTEREST
Corn Futures – 1,677,261 (Previous record 1,664,583 set 11/8/2010)
Soybean Oil Futures – 375,456 (Previous record 375,168 set 11/8/2010)
Corn Options – 2,310,175 (Previous record 2,267,247 set 11/8/2010)
Soybean Meal Options – 130,285 (Previous record 125,725 set 11/8/2010)
Soybean Oil Options – 276,685 (Previous record 269,337 set 11/8/2010)

 

Mike

-------

At 12-Noon:

Grain markets remain lower. I asked a trader whether he thought the corn market would see buying on the close today. He had an interesting response. His short answer is "no". He goes on to say, "Because the market has stopped at the $5.60 area twice recently, and at $5.63, I don't see the people that have already taken profits (and good ones) wanting to put their money back in until that $5.60 level. And on the top side, we seem to get stuck around $5.92. So, I don't see people buying until we get close to that $5.92 area, which would signal a run higher over $6 again. So, a lot has to happen to either drop to that trigger of $5.60 or to get to that $5.92 area. And by the way, we won't see another impacting report for two months. What else is there for two months, nothing other than China possibly buying U.S. corn. So, I see us chopping around here for awhile."

 

 

After reading that take, what's yours?

 

Mike

-----------

 

At mid-session:

The Dec corn futures are 4 cents lower at $5.72 1/4. The Jan. soybean contract is 3 cents lower at $13.26. The Dec. wheat futures are 9 1/4 cents lower at $7.12 1/2.  The Dec. soymeal futures contract is $4.00 lower at $358.30 per short ton. The Dec. soyoil futures contract is $0.40 higher at $53.80.

 

In the outside markets, the NYMEX crude oil is $1.19 per barrel higher, the dollar is lower, and the Dow Jones Industrials are down 18 points.

 

Mike

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

At 10:25am:

Corn is 6 cents lower, soybeans are a few cents lower, and wheat is 9 lower.

 

One trader says the market is setting back because it was looking for a more bullish corn report and didn't get it. Plus, with so much length in the market (lots of folks 'long'), you are seeing some profit-taking. There's talk, here on the floor, of about 400,000 bushels of corn 'puts' that were transacted today, related to some possible future China corn purchases. This is a sign that China isn't going to come in and shock the market one day. Instead, they want to be buying on increments on the way down, or on breaks, one trader says. Again, just a thought.

 

Otherwise, the floor is fairly quiet vs. yesterday. Will there be buying on the close, you ask? I don't know, that's what I'm trying to find out.

 

Mike

-----

 

At the open:

The Dec corn futures opened 8 1/2 cents lower at $5.68 1/4. The Nov. soybean contract opened 10 1/4 cents lower at $13.09. The Dec. wheat futures opened 8 3/4 cents lower.  The Dec. soymeal futures contract opened $4.30 lower at $358.10 per short ton. The Dec. soyoil futures contract opened $0.26 lower at $53.14.

 

In the outside markets, the NYMEX crude oil is $0.05 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 68 points.

 

Mike

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At 8am:

 

Wow! What a day yesterday, huh? Did you get it all sold, or at least some? So, vs. a year ago, soybeans are up 27%, cotton is up 100%, crude oil up 9%, gold up 29%, copper up 21%. In fact, gold is setting all-time records, crude oil is near records, and copper is very close to all-time highs.

 

And the demand keeps coming. USDA announces Wednesday that China bought 110,000 metric tons of U.S. soybeans for 2010-11.

 

Mike

--------

At 6:55am:

 

Early calls: Corn down 2-4 cents, soybeans 3-5 lower, and and wheat 3-5 lower.


Trackers:

Overnight grain markets=Trading lower.

Crude Oil=$0.25 lower.

Dollar=Lower.

Wall Street=Seen trading little changed as investors assess the impacts of the Fed's recent quantitative easing measures. Also, the European soverign debt issues are rearing their ugly heads again. Plus, the Dollar remains strong, pushing up commodities.

World  Markets=Mixed-to-lower.

 

 

More in a minute,

Mike

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7 Replies
jrsiajdranch
Veteran Advisor

Re: From the floor November 10

Here is a question or a couple.  Have any of the firms done any guesses on demand impact based on these higher ffeed numbers? 

I would think that these higher prices will cut feed use.

ALso does these higher prices cause the blenders credit become a mute point with a new congress coming in?

 

If we lose more animals and some possible incentivized demand does that cut the corn price or are we all about inflation hedges here in this rareified air.

Thanks again for your posts. JR

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marketeye
Senior Contributor

Re: From the floor November 10

jrsiajdranch,

 

Here is a take from Tim Hannagan, a PFGBest.com grain analyst on demand. It might not directly address your question, but an interesting perspective nonetheless on demand. He says, "Our Monday weekly export inspection report showed 15.5 million bushels of wheat was inspected for near term export down from 17.7 the week prior ,18 a year ago and four-week average of 20. Neutral for demand at best. Even though traders are concerned over recent world shortfalls and production, they see huge ending stocks here and abroad as a reason to buy only as needed while awaiting the 2011 production to come to light, as to whether they would begin to panic buying again or over buy to build reserves. Corn inspections were 24.8 million bushels down from 30 the week prior, 28 a year ago and four-week average of 25. Anything under 30  is considered a negative demand number. 30 up to 39 is friendly and 40 or more is bullish. We expect demand the week of a big USDA crop report to fall back, but the move above 5.604 weeks ago. Saw corn exports slow measurably. Some of the slowdown is price resistance and some China and other countries loading up on beans leaving room for better corn sales when the bean buying is over. Bean inspections were 56.9 million bushels versus 73 the week prior, 64 year ago and strong four-week average of 56. With decent rains in South America last week and a 6 to 10 day wetter forecast taking away some of the recent panic buying on a dry planting season in Brazil. We're seeing a bit of a pullback. Most of the slowdown in demand this week is coming from countries other than China, the biggest bean buyer of all. Of the 56 m.b. inspected for export, China was in for 48.2 of the total versus the two prior weeks of 47.6 and 41. So China's presence keeps bean demand a bullish pricing source."

 

Mike

 

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GoredHusker
Senior Contributor

Re: From the floor November 10

My math says we need to ship out approximately 41.1 million bushels of corn weekly to hit the USDA's target.  In the last couple of months, I don't even think we've been averaging 30 million on a weekly basis.  Now, we look at the feed number.  USDA has feed demand pegged at around 5.3 billion bushels.  I find this interesting because the largest ever feed use was 6.2 billion which we did when there was little to no distillers grain to be found.  With approximately 1.5 billion bushels worth of distillers grain now to be fed, the USDA is now telling us we're going to feed approximately 6.8 billion bushels of corn or distillers grain?  I guess someone forgot to mention all of this livestock expansion that has been going on for the past three years.  I would venture to guess that the blenders credit doesn't get passed during the lame duck session.  This would mean at the earliest that it would be passed would be towards the end of January to the first of February.  With the new faces in Congress, I highly doubt the blenders credit will be one of the first things accomplished.  At the earliest, I believe it will be April before we see it extended.  While it will more than likely be retroactive, we'll still see several plants idled during this period.  Take the soydiesel for instance.  If it passes with the etoh blenders credit and is also retroactive, do you really think it will do much for this stellar 21% capacity we've been at for 2010?  At the end of the day, we just raised the third largest corn crop in history only to fall well short of supposed demand by nearly 500 million bushels.  Our food and energy policy just isn't adding up. 

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Re: From the floor November 10

Do you think we've reached the high point for the near future, 3 months?

 

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AlKluis
Contributor

Re: From the floor November 10

It looks like we are changing the ownership in the corn market from funds and specs to end users. The end users will keep buying on this break. I look for an improvement in corn exports tomorrow.

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marketeye
Senior Contributor

Re: From the floor November 10

Al,

 

Floor traders are walking around thinking this market is putting on the 'cruise' control until 2011. Do you believe that? Because there is no impacting-report for a few months, they say the 'goodie' is gone. What say you?

 

And by the way, it's great to see you stop in here for a 'cup of conversation'. How do you like yours, black or with cream? Great to see you stop by.

 

Mike

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Re: From the floor November 10

Thanks.  Sold 5% today.  Black with a side of donuts.

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