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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.

Weekly Wrapup--China and Greece Lead to Mixed Results

Oct 21, 2011

China’s economic slowdown and Greece’s continuing debt issues have left the global marketplace on edge this week.  Volatile and choppy trade has hit the Dow ultimately ending Friday at 11,808.79, which is up 164.30 on the week.  Oil fell $0.35 to settle at $87.62 today as a slowing economy is hurting demand prospects.  The dollar index gained slightly while gold tumbled $43 an ounce finishing at $1,640 Friday.  The grain complex is mixed for the week.

Corn has traded in a relatively tight range this week with little fundamental news to spark the market in any direction.  The December contract has added 9 ¼ cents to settle at $6.49 ¼ today.  The $6.50 area has provided resistance all week as the grain has failed to move solidly past this technical barrier.  Harvest progress has moved rapidly in the dry areas of the Midwest, but delays are being experienced in the soggy Eastern Corn Belt.  Export sales met the lower end of expectations at 1,762,600 MT, which is up 40% over last week.

Soybeans are weak both from a fundamental and technical standpoint.  The oilseed has not gained any day this week and is down 57 ¾ cents to $12.12 ¼ on the November contract.  China’s announcement of a slowing economy hurt this market the most as China is the world’s #1 importer of soybeans.  China did purchase a good deal of soybeans for the weekly export numbers, but we still fell short of industry expectations at 594,700 MT.  Harvest is nearly complete in some states as favorable weather has aided progress.

Wheat has followed corn’s lead this week trading a tight range and adding 8 cents to finish Friday at $6.32 on the December CBOT contract.  With ample world stockpiles and heavy competition abroad for export sales the market has little to get excited about.  Winter wheat planting progress has slowed as many areas are in dire need of a drink.  This weekend’s forecast has light rains to offer, certainly not drought busting.  Exports remain routine and at the lower end of expectations at 399,400 MT, which is down 17% from last week.

  Global economic uncertainty has again found its way into our markets.  Most of the markets were down on the week, but corn and wheat have held their own.  Soybeans took the news hardest.  In the weeks to come, traders will focus on final yield results and the ongoing South American crop planting.




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