From the floor September 30

[marketeye]

At the close:

The Dec corn futures settled 9 1/4 cents lower at $4.95 3/4. The Nov. soybean contract finished 7 3/4 cents higher at $11.06 3/4. The Dec. wheat futures settled 9 1/2 cents lower at $6.74.  The Dec. soyoil futures closed 65 points higher at $45.09. The Dec. soymeal futures contract ended $0.60 lower at $306.90 per short ton.

In the outside markets, the NYMEX crude oil is $2.20 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 12 points.

One wheat options trader left the floor saying, "Everything hit the skids in the wake of the report, with the corn and the wheat getting pretty well thrashed to the tune of down 20+ cents in the early going.  Wheat options implied volatility was off 2% from Wednesday's closing levels in the first hour, as locals dropped bids and underlying futures kept dipping lower. But the lack of volume and the fact that everything turned tail mid-session and started moving back towards unchanged left some scratching their heads with the curiosity that the end of the quarter and the end of the month was seeing too many longs going home with egg on their collective faces."

Mike

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At 12-Noon:

The Dec corn futures are 14 cents lower at $4.90 3/4. The Nov. soybean contract is 4 1/2 cents lower at $10.94 1/2. The Dec. wheat futures are 15 3/4 cents lower at $6.67 3/4.  The Dec. soyoil futures are 22 points higher at $44.66. The Dec. soymeal futures contract is $0.38 lower at $303.70 per short ton.

In the outside markets, the NYMEX crude oil is $1.42 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 34 points.

Mike

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At 8:30am:

Sorry for the 1-hour delay. If you haven't heard, the USDA released very bearish corn data this morning. Here's what I've gathered.

The USDA released mostly bearish grain stocks data Thursday.

For corn, the USDA estimates stocks at 1.708 billion bushels vs. the trade expectation of 1.407 billion bushels.

For soybeans, the USDA placed stocks at 151 million bushels equal to the average trade estimate of 151 million bushels.

For wheat, USDA pegged the stocks at 2.224 billion bushels vs. the average trade estimate of 2.44 billion bushels.

One floor trader says, "Mike the USDA found back the 300 million bushels of corn stocks lost on the June report…when the lows were posted…so look for bearish response today… weak dollar and higher energy prices are supportive… but while we were expecting a higher stocks number than the average guess the 300 million increase in rather large… now have to wait for more yield data on production report a week from Friday but this number will cool our jets.. I would call corn 6 cents lower… support at 492 but resistance below last nights low at 503 basis Dec… beans may be firm on more unwind.. but with harvest under way I am mixed lower."

Jack Scoville, PRICE Futures Group vice-president, says the report is very negative corn, but kind of neutral to beans and wheat.  

“Wheat stocks a little higher than expected, but production a little lower so a wash, and beans dead on,” Scoville says. But corn is the big number and a big number.  We will talk about it all day.  I personally think it is harvest related, but who knows.  

Scoville adds, “Calls should be steady to higher beans, steady wheat, and sharply lower corn, hearing up to 20 lower although I think more like 10. This morning’s weekly export sales were solid to great. So, not a lot of bad news, away from the corn stocks.  I can se corn opening sharply lower and then rebounding kind of strong due to the short crop ideas.”  

Jason Ward, Northstar Commodity Investment Company, says he’s shocked at the USDA’s corn stock estimate.

“The real question we are asking around the office is how much of this, if any, is new crop corn. Those bushels are not supposed to be reported in this report, but with early harvest it may be tough to distinguish.”
Ward adds, “If it is not new crop then it is bearish. We are expecting the market to be 30 lower on corn, because we were all expecting 1.400-1.45 billion bushels. I can’t explain the corn number. I’m completely dumbfounded. How can it be report after report that USDA changes the entire scope of the marketplace?”

Mike

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At 7:05am:

Early calls: Subject to the USDA's Grain Stocks Report to be released at 7:30am CST. Overnight, corn traded 2 cents higher, soybeans up 8, and wheat down 1.

Trackers:

Overnight grain=Trading mostly higher.

Crude oil=Trading $0.85 per barrel higher.

Dollar=Trading lower.

Wall Street= Seen opening lower as investors pause ahead of today's regional business data that could reflect if the stock markets rally was based on fundamentals or something else.

World Markets=Mostly lower. 

More in a minute

Mike,

[zman343]

Wonder where they found the extra 300 mil bu of corn?  Feed demand, ethanol, residual figure???  Or maybe they will spin it that early harvested corn is included in the figure.  Either way that should be the final ending stocks for the 09/10 marketing year and beginning stocks for 10/11.  This will give the USDA some cushion if they feel they need to reduce yields in the October report.  With everything staying constant, yields could drop to 159 and ending stocks would remain equal to where they were projected in the September report.

The wire is saying 10 to 15 lower.  Probably should and could easily be limit down if the market were trading on fundamentals.  But I see equities higher, energy higher, gold higher, and dollar lower.  Looks like a risk on day to me.

[giolucas]

Soybeans look neutral based off the USDA report but due to the negative number on Corn, it will definitely bring it down.  How much is the question?  Would Soybeans at this level $11.00 be a good buy right now?  That is the question of the day.  I will be buying around $10.90 - $10.85 level.  

[hardnox604008]

For what it is worth, the state data isn't entirely transparent but doesn't really support the idea that it is from new crop bushels in the south as some suggest. Delta actually looks pretty well cleaned out. Bushels are pretty well distributed around the corn belt.

[hardnox604008]

Yeah, only a guess, but I'm thinking that on 6/30 they were looking at record crop ratings and some other issues like a lot of out of condition corn, etc. and decided to err on the side of "caution"

They had to fess up, but it is always possible that the urgency of need to fess up has to do with current yields.

One can only speculate, no pun intended.

[Jim Meade / Iowa City]

The opening will get a lot of interest, but the close today and more importantly the close on Monday (after the quarter ends) may be more representative of where we belong.  It's been an interesting season for marketing and it looks like the volatility may continue.

[jec22]

Should set up for the possiblity of E15.  Good news for those worried about ethanol getting chopped.  Also good news since this crop will have a 157 or lower possiblity instead of 162. 

[giolucas]

I thought the grain market responded awesome in face of some bearish news.  Hopefully, tomorrow will be a stronger day for the market and start October with a rally.  

[jrsiajdranch]

I think the uncertainty of the next 5 weeks till the election will hold all things in check!  What happens after that is anybodies guess.  I still hold out that we have hit the board high for the year.  I thought all along the numbers from last years feed usage were to big.  I think they had to pull that out as the livestock guys were going to get there pitchforks and run thru alot of folks with our whining! 

GUys 5 dollars is to high the market cannot absorb this cost we will quit before we go thru another 2008!  Folks, that sucked like no one will ever know from your side of the fence.  And remeber in the case of milk we are about 7 dollars under the price we recieved in the summer of 08 and corn is within 2.50 of the alltime high price I paid for corn here. So realize that corn has to be fed or processed to make the enduser money and right now that ain't happening. 

History does repeat but sometimes we only look at our best history!  I said it before sell your corn now!JR