Traders pull back in light of longer hours
October was quiet for the advisers in the Archer Financial Services, Inc., Ag Hedge Program. The new longer CME trading hours are under fire for the slide in volume. Total corn volume was off 23% from a year ago in September. Full data for October wasn’t available at press time, but if the advisers’ marketing activity for the majority of the month was any indication, the trend continues.
Contributing to the lighter volume is that corn and soybean markets appear trapped in a tight trading range while awaiting updated production numbers and weather conditions in South America. Corn sales advanced 6% and stand at 58% sold for the 2012 crop, while soybean sales were even less, as the hedge position increased 3% to 56% sold.
In addition, 2013 crop sales increased 6% and 3%, respectively, for corn and soybeans in October. The corn market is stuck in a range defined by highs and lows set in October, explains Scott Harms of Archer Financial Services. It will likely take a breakout of this range to spur an uptick in activity, he says.
"The cash market will be closely watched this winter for signs that the pipeline has been depleted, and a surge in basis could encourage cash movement," Harms says. "A cash lead rally or signs of a South American weather problem will provide the best selling opportunities this winter." As of now, most traders are looking for rallies near $7.85 and $6.65 to advance corn sales for 2012 and 2013 crops, respectively.
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