Beans Up 18-22 cents - Corn Wheat up3-5 cents

[Incognito]

Reuters:

Quote:

Asian traders said the market could gain further.

"Importers are expecting that CBOT soybean futures could rise to $12 to $13 per bushel, considering low stocks in the United States and poor weather condition in Brazil which is affecting crops," a Seoul trader said.

Unquote

[crusher]

I'm a lot better at selling into a rising market than pulling the plug as the market collapses. I've kept to my canola selling plan and will probably have my second last target hit this morning. All is fine and dandy until something unexpected comes along - like more terrorism in Israel.

I've made enough unanticipated income off canola in the last month, I may try to pick the top utilizing a short July/long November spread.

Just starting to open up the feed barley bin - has anyone made sales lately?

[Everest]

From one of the best US sites I have found..........



"Early Call: Corn up 5-7, beans up 15-20, wheat up 2-4. Another busted rainfall forecast in S. Brazil/Argentina over the weekend and a dry forecast this week only adds to the bullishness of a reported private forecast on Friday. Scattered storms failed to materialize in the growing regions of S. America and swept too far east along the Brazilian coast. Little rainfall is expected through the 6-10 day period, which will aid harvest up north, but could devastate production down south. Dryness in the southern areas combined with saturated conditions in the north is leading to very low private forecasts, with Sparks rumored to have released a Brazilian soybean production forecast of less than 51mmt (USDA 59.5mmt), which they have since denied. Still, most private forecasts are now centered between 50-55mmt for Brazil. If one were to take the high forecast and combine it with the Argentine exchange's forecast of 34.5mmt, world soybean production could come in 4-5mmt below last year, which would be the first back to back declines in production since 95-96. Port strikes at Brazil's main port continue to plague exports. While the health inspectors have formally stopped their strike, they are expected to slow exports in continued protest to new rules banning overtime. Now the port workers have begun striking. Truckers are the next rumored strike as they're sitting in lines up to 40 miles long and not getting paid to wait. This could push some export demand back to the US, which would be explosive to prices. Traders are grasping for a price that will cool soybean demand, but I wouldn't be surprised if that price is much higher than even I can imagine. One of the main gripes I've heard from customers over the years is the lack of connection between prices paid to farmers versus the price of finished products in the grocery store. However, as we soon may find out, this is a double-edged sword. Because the final cost of a product in the store is so heavily dependent on marketing, packaging and distribution, the actual raw material product it's produced from is becoming less and less of the total cost. This is why breakfast cereal prices were vitually unaffected, with some large companies actually reducing prices in 1996 when corn went to $5.50/bu. This "inelasticity of demand" can allow raw material prices to flucuate wildly without having a major impact on consumption, especially if the end retail product rallies as well. With cattle prices near historic highs and hog prices advancing rapidly, this could help to insulate feeders who have not locked in feed costs at least for a while. Of course, there is a limit to this ability to ignore raw material costs, but it may be way, way higher than what most traders believe or what history would dictate. Since the last major bull markets in soybeans in 1988 and 1973, feeders and other end users have become more sophisticated in their marketing as smaller, less sophisticate producers a now a minority. Most of the large, corporate livestock feeders have active hedging programs and should see rising meat prices more than offset rising feed prices as long as the advance isn't too wild, or too long. Wheat continues to garner strength from ideas that China may soon be the dominate importer of wheat. Local prices have neared $6.50/bu. despite the release of government stocks meant to keep prices in check. China will not allow basic food prices such as bread to spiral out of control as food insecurities are well ingrained in the Chinese leadership. I still believe they'll import 10-20mmt of wheat over the coming year, which is way, way more than the USDA is acknowledging. The USDA just announced another corn sale to an unknown of 345,000mt. It appears that foreign buyers may be on the verge of panic buying after seeing almost daily corn export announcements the past few days."

[pillypillsner]

Everest you have no clue as to why beens have been rising.

[charliep]

I can almost hear the screams of pain on the floor of the CBT and hear the words "Get me out" (there are other words in here but not appropriate for Agri-ville). Just a note these price signals are coming before Northern hemisphere seeding and will impact decisions. Mother nature this summer is the unknown.

Have a clear plan of what you are going to do and stick to it. That should either be pricing into the rally a little at a time or following the market with an equivalent of a tailing stop for the day the market blows higher at the open and then closes lower.

What are others approaches?

[charliep]

Why are beans up hard? Markets belief there are not enough soybeans in the US to get to next September when new crop is harvested. A slightly smaller South American soybean crop (something closer to 95 MMT versus early thinking of 100 MMT early on) combined with different logistics issues in Brazil that are slowing movement of crop to port. Finally the major pain of anyone that is short this market (either needing actual product/uncovered or on the sell side of futures).

Markets like this will run out of gas eventually and correct quickly. To highlight, this rally is occurring early and my thoughts will set back this spring unless supported by weather in the US mid west. This summer will be very interesting (potential to be like 1996). Only time will tell.

[TOM4CWB]

Charlie;

This on DTN about Brazil;

"Celeres added that 54% of the 2003-04 crop had been sold up to last Friday, higher than the 43% sold at the same time last year."

While they have only harvested 30% of the crop.

[Incognito]

Charlie:

USDA has Brazil at 59.5 and Argentina at 36.5...total of 96 MMT

Private estimates now have the crop in SA at between 48-55 for Brazil and 31-34 fro Argentina...low of 79 MMT ...high of 89 MMT, taking out from between 7-17 MMT of the USDA's #s.

Logistics in Brazil are partly driving this thing as the major port is on strike and China's appetite has not waned.

Also, when is the last time u saw wheat up 30 cents in one day?

[charliep]

My math is not to good. 90 MMT is where South America is likely at today with some analysts forecasting lower.

China is the one to watch to see if they start selling out of some of their contracts/rolling them into new crop.

This is a market that will have to be monitored and acted on daily if you want to play the game. Perhaps why I would look at all the tools at your disposal. I am likely the only one who has had a pain thresholds hit (close to stops)and been faced with the rather unpleasant discussion about what to do first in the morning. Set targets and act with the appropriate tools that keep stress to a minimum.

[rain]

Charlie it is getting scary. I have gotten 5 calls the last two days from people who have never had hedge accounts who want to get in for the ride.

It is not a good sign when the uninformed and inexperienced want to play. All everyone wants to do is get long. Nobody wants to hedge

[TOM4CWB]

Rain;

The currency issue is confusing many to real values... Wheat is not as high as we make it out to be... if we look at comparitive currencies 2 years ago... Beans are historically higher than normal...

THe Chinese are flush with cash... and can keep the US going on grain... sale billions in gov AG supports for the US...

Is OPEC shrinking Oil supply to raise US fuel cost... to get BUSH out of office?

[rain]

Tom would a runaway springwheat market get US millers to put more pressure on anti canadian wheat lobby?

[TOM4CWB]

Rain;

In Calgary (WCWGA mtg.)Chairman Ritter had people running to the broker to sell wheat last Thursday... the CWB must have sold most of the 03-04 crop already.

[rain]

If the CWB is selling then I guress it is time to buy!

[Incognito]

Tom:

Did they have a handout of his speech?