Walsh Commercial Hedging 4/24/12
Apr 24, 2012
Good afternoon. I mentioned yesterday that the bean market is going to be volatile in the near term. After yesterdays lower close, the soy complex came roaring back with July beans making new contract highs and finishing at 1465, up 24 cents. New crop November beans finished up 10 ½ at 1352. July beans are up almost 62 cents from last week’s lows. Continued talk of a smaller South America crop from key forecasters and concerns that Argentina could slow the crush pace ahead helped support the strong gains in beans and meal today. Also, there was news of potential frost damage to the Bueros Aires region in Argentina last night and talk that meal offers from Argentina for August and beyond are difficult to come by. May meal settled at 412.10 up 12.30, which is the highest level nearby meal has been since 2009.
The surge in the soy complex didn’t spillover into the grains. Corn and wheat had a choppy two sided trade today. July wheat finished unchanged at 632 ½. At one point today July wheat was up 14 ½ on cold weather concerns for the weekend and early next week for crops in Illinois, Indiana, and Ohio but the mid-day forecast turned warmer for the weekend and the sellers came out into the close for wheat and corn. Spring wheat progress remains on a record fast pace at 37%. The USDA’s weekly all-winter-wheat condition rating crept higher. Kansas report mentioned spotty frost but said progress is 3 weeks ahead of normal, giving the impression that the crop is already all but made. The May production report might have big yield and production estimates for the winter wheat crop. July corn finished at 608 down 4 ½ and new crop December corn was down 4 settling at 541 ¾. The corn market saw confirmation of China demand from the USDA sales news this morning and the market responded by surging higher but the “buy the rumor, sell the fact” helped to spark a sell-off from the early highs. Private exporters reported a sale of 480,000 tonnes of US corn to an unknown destination (Hint...China) for the 2011/12 season. All eyes will be on the weather for this weekend and early next week as this week progresses.
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