Markets hot news--Feb 17

[John_Walter]

Afternoon action:

* Rallies in corn and cotton on tight supplies helped lift ag commodities. Corn was the big winner on strong export sales and talk that China was considering cutting import taxes. March corn ended up 3.2% at $7.12 3/4 per bushel. One analyst viewed the day as opportunity for purchasers to buy on the break, given the tight supply.

* Soy products got a lift from soybeans and China's tax talk. Soymeal broke a five-day losing streak with March CBOT soyoil closing up 2.9% to 58.25c/pound and March soymeal climbed 2.3% to $372.70/short ton.

* Wheat futures rallied on a recovery in exports and renewed concerns about weather in North America. Soft red winter wheat for March delivery, the most-active contract, rose 13 3/4 cents, or 1.6%, to $8.50 3/4 a bushel at the CBOT.

* Check out the differences in prices for cash grain for livestock, truck delivered. Corn for example brought 7.09 3/4 in St. Louis, 6.47 3/4 in Marshall, MN. (Click for full story.)

Some highlights this morning;

* Word that China may cut its soybean and soyoil import tax helped support soy prices overnight. CBOT March soybeans overnight climbed 13 1/4c to $13.79 1/4 a bushel, while May corn rose 8 1/2c to $7.09 1/2. U.S. soybean futures are expected to open stronger today in a recovery from heavy losses and on the China news.

* Also on the China front: That country's  Ministry of Agriculture has restated that there's never been any approval of imported GM seed for commercial planting in the country, rejecting recent reports that China had pemitted planting of GM wheat, corn and rice.

* Is the February break over for wheat? Today and Friday could tell the story, says technical analyst Jim Wycoff.  "A close in March wheat futures prices back above chart resistance at $8.74 a bushel would provide the bulls with some fresh upside near-term technical momentum," he writes. (Full story here.)

* US wheat advanced overnight in a recovery from heavy selling earlier this week, Dow Jones reports.  March wheat rose 9 1/2c to $8.46 1/2.

* NOAA is forecasting March-May temperatures to be below normal for the Northwest  to the Great Lakes.

* Analysts think tomorrow's USDA cattle-on-feed report will show rising numbers in U.S. feedlots last month due to strong prices and improved weather.

* Spot bids at Iowa ethanol plants:  6.4950 to 6.7350 , down 1 to unchanged. Any reports from your neighborhood?

[jrsiajdranch]

Good afternnon John! Been hauling manure all morning on a hay field we are tearing up to plant corn on. So been kinda busy. Just checked and corn up 16 cents wow! $7.06 That is huge!  Yesterday I went to a dairy meeting about 25 farms represented after lunch they read the markets. at that time corn was down there was a lot of smiles and a few whoops of glee! Out of 25 farms only Four of us grew our own feed!

I just wonder how much of todays price increase has to do with the things you mentioned above or are they because the NY FED bought bonds yesterday as part of the QE2?

I better get going or someone will think I am lazy posting in the middle of the day like this! HE HE

[stewfarm]

This grain market is getting way too volatile.  Too many speculators.  History may not repeat itself, but it can resemble itself.  It reminds me of 1972-1974. ( now I have revealed myself as an old guy)

[oncearound]

1000 WK $11 calls bought in the last minute of trade,,,,,furrrumph! ,

[Mike M2692830]

I read the closing market report from FC Stone and here is a piece of it that got my attention in the soybean comments.

.Trade clearly influenced by talk of China to reduce or eliminate food import taxes.  Trade talking of larger soyoil imports.  Ideas of China to lift food price controls at the end of March to send domestic vegetable oil prices sharply higher there.  This to stimulate more rapid soybean imports.  Cotton prices currently exceeding any historical perspective now in a multiple lock limit up tradeless panic.  This an example of what can happen when commodity supply demand situations fail to respond quickly enough to market signals with inadequate plantings and surging demand.  Elevator grain hedgers should take careful note of a possible parallel situation developing in grains.  An uncontrolled grain price explosion could be precariously closer than most believe.  Don’t worry, be happy Secretary of Ag statements could quickly give way to a sobering and possibly shocking view of clearly inadequate new crop plantings for corn and soy this spring.  As soon as the Feb 24 Ag Forum next week or no later than the critical March 31 Acreage survey, the world food market could be shocked with unsolvable tightness in the US supply demand situation.  Explosive price action to the upside will be a real threat well into summer.  Now is the time to consider securing extended credit lines for hedges and considering moving cash grain to recycle monies. 

Very interesting suggestions made about securing credit lines for hedging(or speculating)...MikeM