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Grain Hedge

RSS By: Brock Schimbeno,

Grain Hedge is a self-directed discount brokerage that saves farmers money when trading in the futures and options market. For $7 commissions per side producers can execute their marketing strategy with authority, any time the markets trade.

Macros Positive, Grain Mixed

Feb 16, 2012

The equity markets have taken center stage this week as several key indexes have reached multiyear highs.  The Dow is up 102.85 as of the close Thursday settling at 12,904.08.  Oil has risen due to Middle East instability and is up $3.29 a barrel to close today at $102.28.  Gold has found some buyers climbing $7.40 an ounce to end trade today at $1,730.  The dollar index has benefited from Greece debt uncertainties, which has pressured commodities.  The grains are mixed so far this week.

Corn has fought a two-sided battle this week but is ultimately up 4 ½ cents to finish trade at $6.36 ¼ on the March contract.  Demand concerns stemming from large ethanol stocks and feed competition from wheat sent the market to multi-week lows before turning around Thursday.  Today, better than expected export sales sent the market higher and were reported as 1,005,900 MT, which is up 44.9% from last week.  South American weather remains a concern.

Soybeans have been the leader to the upside as Chinese demand prospects were heightened after visits from some top tier officials.  The oilseed is up 29 ¼ cents to settle at $12.58 ¼ on the March contract.  Soybeans are trying to buy acres this spring and the ratio between new crop soybeans and new crop corn is the highest it’s been since July.  South American production remains a concern for the market.  Export sales were disappointing at 436,700 MT, which is down 27.6% from last week.

Wheat has been the weakest of the grains losing 2 cents on the March CBOT contract to finish trade today at $6.28.  There continues to be a large supply of wheat on the world market and more recently Australia revised their production estimates higher.  Despite a stronger dollar index, U.S. wheat is the most competitive in the marketplace evidenced by two sales to Egypt.  Export sales were reported as 420,400 MT, which is down 40.6% from last week.

The Dow and other indices have reached multiyear highs which have gathered many traders’ attentions.  Grains have been mixed this week with corn and soybeans rallying, while wheat has fallen slightly.  Demand and weather concerns have been a mainstay over the last several weeks.  Looking ahead, traders and producers will focus on planting intentions and the South American harvest.

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