Joseph Vaclavik is the president at Standard Grain in Chicago. Standard Grain provides futures and options brokerage to farms, feedlots, elevators, processors, end-users and traders. Visit www.standardgrain.com for more information.
Tuesday a.m. Grain Market Update
Oct 30, 2012
Soybeans have rebounded this morning after a poor performance yesterday. Monday’s break was pinned on better weather in South American and the perception that the USDA may raise the soybean yield number here in the US between now and January. The Brazilian soybean crop is 28% planted, which is slightly below average for this point in the growing season. Some areas of Argentina are seeing too much rain this week, causing planting delays. The December corn contract traded below the 100-day moving average for the first time since June during yesterday’s session and sits just a few cents above it this morning. Many fund traders keep an eye on major moving averages, which can sometimes signal a trend change. The USDA delayed their Crop Progress report yesterday due to Hurricane Sandy. The report is scheduled to be released this afternoon.
Funds will begin to roll commodity positions out of the December contracts and into 2013 beginning tomorrow. The Rogers Index (RICI) will start on Wednesday, Deutsche Bank of Friday; Goldman Sachs will begin one week from Wednesday. During these rolls, an opportunity for producers to roll futures or HTAs into March/May could present itself as large traders bear spread the market.
CME Chairman Duffy was quoted as saying that CME Group will not take action to reduce grain trading hours. "We need to remain competitive and will keep our markets open as long as others are open at the same time" said Duffy.
Outside markets are choppy this morning. Equity futures are mostly unchanged after trading sharply lower early last night. Crude oil is marginally higher; Euro currency is also higher. The New York Stock Exchange is closed again today due the hurricane. Many firms in New York and surrounding areas are absent due to the weather and power outages.
Technical indicators in corn, soybeans and wheat still look negative in our opinion. The corn market has been unable to hold a trade above $7.60/Dec while the rebound in the soybean market looks to be over the time being. The wheat chart continues to trade in a slowly down-trending channel and has been unable to hold a rally despite news of a Ukraine export ban. The market may not see a major move in either direction until the November 9th Crop Production report from the USDA.
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