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Grain Hedge

RSS By: Brock Schimbeno, AgWeb.com

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.

Mixed Trade to Begin February

Feb 02, 2012


It’s Ground Hog Day, the day when Punxsutawney Phil emerges from his den and gives his prediction on when winter will end.  He saw his shadow, so only 6 weeks of winter remain.  The equity and commodity markets have started out mixed to begin February, however.  The Dow is up 46.62 points to 12,707.08 after choppy, mostly sideways trade for the week.  Oil is off $2.99 a barrel to settle at $96.64 today.  Gold is up another $24.80 an ounce to $1,762.20 as the dollar index has risen slightly.  The agricultural commodities were mixed as well.

Corn is up 1 ¼ cents to finish trade today at $6.43 on the March contract.  The market is searching for a direction after much needed rain hit South America and technical resistance areas have proven tough to get over.  Not much fundamentally has changed leading to the choppy trade.  Export sales again exceeded expectations at 912,000 MT, which is off 4.8% from last week.

Soybeans are down 2 cents for the week to end trade Thursday at $12.17 on the March contract.  A large sell-off Monday was followed by two days of rallying as weather concerns in South America have subsided for the time being.  Despite recent strength in this market, underlying fundamentals remain weak.  Evidence of this weakness comes from subpar exports.  Export sales again missed their target and were reported as 308,400 MT, which is down 33.9% from last week.

Wheat has been the leader to the upside over the last couple of weeks with this week being no different.  The grain is up 15 ½ cents on the CBOT March contract to settle at $6.62 ¾ today.  Concerns surrounding Russian and Black Sea wheat exports have stemmed from a bitterly cold front hitting the winter wheat growing regions.  Adding to this concern is the possibility of an export ban or export levies to be imposed on wheat leaving the region.  Both factors have yet to be fully realized by the market.  Export sales were routine again at 518,900 MT, which is down 14.2% from last week.

The markets have done little to start the month of February, but the good news so far is that there is only 6 weeks of winter left according to Punxsutawney Phil.  Weather concerns have moved from South America to the Black Sea region in Europe.  Wheat has been the leader to the upside while corn and soybeans have followed.  With only a few weeks left in winter, producers and traders are looking forward to planting and the important Planting Intentions report due out on March 30th.


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