Financial crash today

[aj]

Wow.....all the commodities down,cattle, down. Is the crash here? What is going down?

 

[TJ]

Wow.....all the commodities down,cattle, down. Is the crash here? What is going down?

Down, but still pretty high.  Corn over $5.  Beans over $12.  Cattle over $1.  Etc.

 

[aj]

Right....but the way I understand it our coop is not bidding on grain as of this afternoon. You can't sell? I'm locked in well on wheat and a dab of corn for next year though.

 

[peachy]

I have heard of elevators not bidding on grain. They will just hold off til the price stabilizes,probably to cover their butt.

 

[TJ]

It's a really good time to have grass cattle & cash rent on crop ground is all I know.

 

[aj]

The elevators can't protect themselves till monday on the board. What if corn is limit down monday.......can they still refuse if they don't have a buyer on the board? I think the funds have over priced wheat and corn by at least a buck so I think its corecting or something.

 

[SouthWest]

CHICAGO (Dow Jones)--U.S. corn futures dropped to their daily, exchange-imposed limits at the Chicago Board of Trade on Friday as speculative traders, skittish of talk of tightening monetary policy in China, aggressively sold the market.

CBOT corn for December delivery dropped the 30-cent limit, or 5.3%, to $5.34 a bushel. Speculative fund selling was estimated at 26,000 contracts.

The fear of China's raising interest rates prompted the selloff, with corn futures extending losses for the sixth consecutive day, said Terry Reilly, analyst with Citigroup in Chicago.

The market is concerned that policy tightening would dilute the strength of Chinese demand. People had expected China to reemerge as a big buyer of U.S. corn this year.

The market has been defensive since prices reversed lower this week after climbing more than 75% since June on worries the 2010 harvest supplies would not be large enough to meet strong demand. The U.S. is the world's largest producer of corn, relied on to keep global markets adequately supplied.

Prices have fallen 71 cents since Tuesday's high of $6.05, and traders note that demand has appeared to weaken at the higher prices.

Broad-based losses were seen across the commodity sector, starting in Asian markets overnight and spilling over into the U.S. Corn followed soybeans to limit down levels, with the China news serving as the catalyst to extend the losses of an overbought market, said John Kleist, broker/analyst with Allendale Inc. in McHenry, Ill.

The market became a little overextended to the upside, with routine export demand reduced livestock feeding projections a clear sign that prices had reach levels where demand rationing is occurring, Kleist said.

Floor traders said futures were trading synthetically 1 cent to 2 cents lower than the futures settlement in the options market. Synthetic prices are the implied price of futures based on options relationships.

The market remains buoyed by supportive fundamental outlooks, with traders expecting commercial buyers to take advantage of lower prices once traders clear out of riskier market positions, traders said.

CBOT oat futures ended sharply lower, declining in unison with the liquidation phase in commodity markets. December oats settled 19 cents or 5.3% lower at $3.39 1/2.

Ethanol futures ended lower, backpedaling in step with declines in corn and energy futures. Corn is the primary feedstock for U.S. ethanol production. December ethanol ended $0.134 or 5.9% lower at $2.139 a gallon.

-By Andrew Johnson Jr., Dow Jones Newswires, (312) 347-4604 [email protected]

 

[hamburgman]

Inflation fears in china a 4.46 i believe inflation rate

 

[ZNT]

If someone pays $5000 for a steer that is only worth $3000, and then sells it for $4000, would you say the steer market crashed?  No, you would say they paid too much for the steer at the time.  This is the same thing that happened in the commodities market.  Speculators drove up the price due to the worries that the drought in Russia would affect the supply of grain.  Now that the supplies concerns are easing, speculators are looking for any reason at all to sell their positions, i.e. China.

Long term trends are what we have to look at in the stock market, and the overall price of commodities are still very good.  If you are a farmer and can't make money at these prices after the "crash", then it might be time to look at a new profession.

 

[aj]

Good points. The volatility of it is whats crazy. If you are a feedlot, do you buy 4.75 corn or do you wait till it drops to 2.00? Or do you buy monthly and hope it doesn't go to 6.00$. It can break you if you are on the wrong end of the swing. Knew of a big feedlot that bought a bunch of wet corn at 6$ the one fall and the price swang way back. They weren't singing.Bout broke em. I'm hearing a .80 cost of gain figures. It was 60 something.

 

[knabe]

If someone pays $5000 for a steer that is only worth $3000, and then sells it for $4000, would you say the steer market crashed? 

how about a house at 500,000 and sold at 400,000?  that's a 20% down which most people didn't do the last 5-7 years and now that the adjustable came due, they can't afford it so the price will go to 300,000 and for some reason people think this is bad (that the real price is adjusted to)

 

[kanshow]

aj did you get some corn sold this morning.  It's almost limit UP this morning here.  I think beans are up about 30 cents too. 

 

[aj]

I'm going to do some more corn. I still think when the funds get out the market will bomb out at least a buck.

 

[kanshow]

Wonder what they'll do today...  they are called down some today based on overnights.   

Remember way back when you could get a price for the week and they didn't fluctuate a few cents beyond that.    There is too much technology & information in the system now.  If someone in China sneezes when they are typing in a number & adds a few zeros, the markets go crazy. 

 

[rob11woods]

It is actually not a wonder for me.. anyway, these prices can be so unstable. there are times when they are really low and times when they are really high..

 

[knabe]

i think the EPA might have increased the ethanol percent from 10 to 15% the other day or is trying to in spite of people wanting more evidence that it doesn't affect older vehicles.

doesn't matter.  the epa wants them off the road anyway.  it's the new government way to get around actually voting on things.  just create agencies to do all they stuff people don't want to be on record voting for.

 

[hntwhitetail]

i think the EPA might have increased the ethanol percent from 10 to 15% the other day or is trying to in spite of people wanting more evidence that it doesn't affect older vehicles.

doesn't matter.  the epa wants them off the road anyway.  it's the new government way to get around actually voting on things.  just create agencies to do all they stuff people don't want to be on record voting for.

I think you nailed that one on the head.