EHedger Afternoon Grain Commentary 3-15-2012
Mar 15, 2012
Grains closed strong with corn wheat and beans all settling near the highs of the day. May corn closed 10 ¼ cents higher at $6.69, May soybeans closed 18 ¾ cents higher at $13.69, and May wheat closed 21 cents higher at $6.64 ¾.
Export sales were above expectations for soybeans, decent for corn, and below expectations for wheat. We did have sale announcements for 60,000 MTS of US SRW to Egypt before the market opened this morning which also helped in the wheat strength. Ultimately wheat stops were triggered and was a large reason for such an abrupt rally on the open.
Weekly Export Sales (Estimates vs Actual):
Estimated Range Actual
Corn: 600,000 – 850,000 MTs 836,400 MTs
Soybeans: 650,000 – 900,000 MTs 1,393,700 MTs
Wheat: 400,000 – 600,000 MTs 360,300 MTs
As we approach the March 30th USDA reports, the market continues to have wide and volatile swings. There has been heavy money flow into "bullspreading" as short term supply concerns are the biggest factor. We are getting to that time of year where our export sales should start to slow down for beans as South America takes over for much of that world demand. Today’s weekly sales report shows old crop bean sales of 22.4 million bu was much more than they were expecting and was a major reason beans stayed strong all day. If you need to hedge old crop soybeans, the option volatility is still quite low (relatively speaking) which means buying option protection may not be a bad idea.
For new crop corn we are back above the 100 day moving average. This has been a very strong resistance level indicator for the past couple of months. The next target for the market may be up at the 200 day moving average at $5.95.
We expect March to be a volatile month as traders gear up for the Planting Intentions report and Quarterly stocks data. If you have any questions, please contact an EHedger broker today, or sign up for a free trial using the link below. Thanks and have a great rest of the week!!!
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