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Senior Contributor

From the floor November 11

At the close:

The Dec corn futures settled 2 3/4 cents lower at $5.64. The Jan. soybean contract closed 19 1/2 cents higher at $13.39. The Dec. wheat futures ended 6 cents lower at $7.04.  The Jan. soymeal futures contract closed $2.70 higher at $360.10 per short ton. The Jan. soyoil futures contract settled $1.10 higher at $55.35.

 

In the outside markets, the NYMEX crude oil is $0.08 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 79 points.

 

Have you ever wondered how the CME Group settles prices? Here is an explanation buried in their website:   Livestock products are settled to the midpoint of the trades or the last valid price in the pit (including trades, higher bids, lower offers, or nominal close based on prior settle if no activity) between 12:59:30- 13:00:00 CT. Dairy products are settled to the VWAP of the trades or the last valid price on Globex between 13:09:30-13:10:00 CT. The lead contract month in Corn, Soybean, Meal, Oil, and Oat futures is settled at the price at which the Pit Committee, in consultation with Exchange staff determines traded the preponderance of the volume in the closing range and the back contract months are settled to keep the spread relationships in line. The lead contract month in Wheat and Rice futures settle to the VWAP of trades on Globex between 13:14:00-13:15:00 CT and the next 4 contract months in Wheat and all deferred months in Rice are settled based on Globex spread data. Wheat futures beyond the fifth month are settled by the Pit Committee in consultation with Exchange staff based upon spread relationships.

 

Mike

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At 12:30pm:

One analyst agrees the Informa acreage estimates have moved the needle on these markets today. He says, "With the holiday having the government closed theres no new information for the markets to trade off of so there trading off there own thoughts which is scary. Corn and wheat are generally following the current trend of taking profits now that the feared crop report is over but beans found some early strength off a private crop forecaster who published a report suggesting farmers will plant two million less bean acres next year, this pulled beans up dragging corn and wheat off there lows. But, sellers have returned as of late for corn and wheat with new lows."

 

Mike

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At mid-session:

The Dec corn futures are 1 cent higher at $5.67 3/4. The Jan. soybean contract is 12 1/2 cents higher at $13.32. The Dec. wheat futures are 1 1/2 cents lower at $7.08 1/2.  The Jan. soymeal futures contract is $3.40 higher at $360.80 per short ton. The Jan. soyoil futures contract is $0.08 higher at $54.33.

 

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 99 points.

 

Informa says the U.S. 2011 corn acres in 2011 will be 93.1 million vs. the USDA's 88.2. That's over a 5.0% increase. Also, the firm says the U.S. farmers will plant 2.5% less soybeans in 2011, 75.8 million vs. the USDA's latest estimate of 77.7 million. This pushed up the 2011 soybean contracts by 20¢.

 

 

Meanwhile, the CME announced Thursday that several contracts set record open interest marks yesterday.  

Here are a few: Soybean oil futures and options – 655,587 open interest.
                          Corn futures and options – 3,985,399 open interest.

 

Mike

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At the open:

The Dec corn futures opened 2 1/2 cents higher at $5.69 1/4. The Jan. soybean contract opened 5 1/4 cents higher at $13.24 3/4. The Dec. wheat futures opened 3/4 of a cent lower at $7.09.  The Jan. soymeal futures contract opened $0.50 higher at $357.90 per short ton. The Jan. soyoil futures contract opened $0.08 lower at $54.17.

 

In the outside markets, the NYMEX crude oil is $0.19 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 89 points.

 

Mike

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At 6:40am:

One trader says, "After some follow through selling from the specs, I did not hear of any farm selling around here yesterday, and I saw no selling from Brazil, either.  Also, on Wednesday, 'options implied volatilities' were under pressure in the corn, and this implies a little more weakness.  But, there is pent up buying to be done in corn and I think it got started yesterday or will on any further weakness.  So I don't think there is a whole lot more down side.  Usually the buying or selling comes over 3 days. So, this bout of liquidation could be about over.  I also don't think the market is dead until after the first of the year.  I can understand why people might think that way.  Specs have made a lot of money and might not do much if they leave now.  But, the USDA data does not show a market to me that is likely to be dead for that long at all.  I tend to think we will get this correction done with and then start to move higher again.  The dollar shows the makings of a turn but needs to follow through now.  Either way, the USDA projections do not imply a slow market.  We will keep ears to the ground and anything to marginally affect prices one way or another will get magnified," he says.


Mike

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At 6:30am:


Early calls: Corn up 3-5 cents, soybeans 4-6 higher, and and wheat 3-5 higher.


Trackers:

Overnight grain markets=Trading higher.

Crude Oil=$0.47 higher.

Dollar=Higher.

Wall Street=Seen trading lower with more corporate earnings reports being watched.

World  Markets=Mixed-to-lower.

 

Personal Note: Happy Veterans Day. My dad served briefly in the Korean War. He remains very active in the American Legion and I couldn't be prouder. I realize this has little to do with markets. But, if he didn't exist neither would I. 


More in a minute,

Mike

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7 Replies
Senior Contributor

Re: From the floor November 11

"Specs have made a lot of money "

The specs haven't made any money until they sell their position - all their money is on paper.  It seems to me, they'll likely want to sell some before the reporting period.  That will affect the market.

 

"...anything to marginally affect prices one way or another will get magnified,"  I sure agree with that.  The country is very skittish about the value of the currency and we're going to get more concerned, making for even more potential for volatility.

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Arb
Veteran Reader

Re: From the floor November 11

Mike

 

During these volatile times i really appreciate your daily postings. Great work.

 

Best

 

Andy

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Senior Contributor

Re: From the floor November 11

Arb,

 

If there is one thing I realize, the stakes are high for the U.S. farmer. You can read about how farming is so business-oriented anymore, and things are changing rapidly and not take that seriously. But, when you sit in a farmer's kitchen and listen to him talk about what his costs are, his equipment needs, the multiple decisions he needs to make (well in advance) of when he needs the product or material, you really get the reality of what he's up against. And the sad part of it, some 'finer aged' producers will admit that some of this new way of farming is beyond them. So, to your point, these are volatile times. I really hope the information can be used in a helpful way. I still believe much of what I write is noise to the market and you should rely more on a 'marketing plan'. But, maybe this 'noise' can frame-up a farmer's thoughts when deciding on a risk management outline. Thanks for your visits Arb, we appreciate them.

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Senior Advisor

Re: From the floor November 11

93M corn acres and trend line or slightly above will hardly meet demand next year and will certainly not increase stocks to comfort levels.  Not to mention soya need acres, probably 3M or so themselves.  Cotton will surely need 3-4M more.  And wheat, well wheat has taken some corn acres I would assume.....

 

This isnt about how the acres are divided up right now, its about all four crops need more acres and we dont have too many to spare.  Corn and soya alone need a combined 6-8M more, cotton will for sure not give up acres and probably need 3-4M more.  Winter wheat probably took 2-4M from something.  Net CRP acres were only positive by 100-200K so nothing there.  We planted a pretty large acreage of many crops in 2010, and many acres that were in hay/pasture/idle before 2007 were put into production in 2008 and have probably been utilized for something since.  Were do these "new" acres come from?????????????????We are robbing Peter to pay Paul????????

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Frequent Contributor

Re: From the floor November 11

 

Hi

When does USDA make their first acreage report??

The figures of  Informa today does that say anything on wheat??

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Senior Contributor

Re: From the floor November 11

The first 2011 acreage estimate will be March 2011.

 

Informa wheat estimate: 56.1 million acres vs. 944,000 acres less than USDA's latest estimate. 2011 All-cotton plantings went up 1.2 million, compared to USDA's latest estimate, to 12.2 million acres.

 

Mike

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Highlighted
Contributor

Re: From the floor November 11

Mike, with 5.4 million prevent planted last year and the prices higher this year, should expect some acreage to come from there, with weather cooperating, besides we could up beans another 2-3 million acres from DC compared to last year. Again depending on next years weather.  With these prices, I could see corn at 94 million acres and beans close to 80 million, but if we have rain like the last 2 years, all bets are off.

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