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EHedger Afternoon Grain Commentary 4/19/12
Apr 19, 2012
Grains reversed off their lows from yesterday to trade sharply higher today. May corn lead the way finishing 19 ¼ cents higher at $6.21. May soybeans finished 8 cents higher at $14.15 ¾, and May wheat 14 cents higher at $6.24 ¾.
Overnight the markets steadily traded higher. Concerns over the quality of EU sourced corn have slowed/stopped Japan from purchasing European/Ukrainian old crop corn. This helped fuel a rally in our markets as demand could pick up for US corn. Corn export sales were rather poor with new crop actually seeing a negative 2,400 MTs. Wheat export sales were a little below expectations and soybeans, soymeal, and soyoil were all strong.
Estimated Range Old Crop New Crop
Corn 700,000 – 950,000 MTs 300,700 MTs -2,400 MTs
Soybeans 850,000 – 1,100,000 MTs 374,300 MTs 845,000 MTs
Wheat 450,000 – 650,000 MTs 365,900 MTs 76,300 MTs
Soybean Meal 75,000 – 150,000 MTs 300,800 MTs 1,500 MTs
Soybean Oil 0 – 20,000 MTs 23,900 MTs 0 MTs
The funds were estimated heavy buyers of corn today as we have fresh rumors of China purchasing corn. The rumor mill did not say whether this was old crop or new crop. The fact that the price of corn and more specifically old crop corn has been hammered over the past week helped make this rally a little stronger. Soybeans were strong from the start but dropped all the way to negative territory during the midday session. Even with these massive "flat-price" intra-day moves the July – November bean spread stayed supported all day. November soybeans are right at their long-term trendline support level (see chart). If they hold support here we may see the price try to head back towards $14. If not this would be the first time they break the upward trend since it started back in December and may be a signal for a downside corrective move.
Chart: November Soybeans
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