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.
Bean Strength Continues, Corn Rebounds...
Mar 27, 2012
Note: I will be a guest on Fox Business Network this afternoon around 12:30pm CST to discuss the grain markets.
· Grain markets up overnight led by soybeans; May corn reversing to the downside yesterday after trading sharply higher early in the session; Recent lows still holding in both old and new crop corn contracts despite weakness
· New crop soybean vs. corn spreads traded new highs yesterday; CZ vs. SX now at 2.4 to 1; Soybean market clearly trying to buy back last minute acreage, or conceding that corn will get lion’s share of US acreage
· New highs in EU wheat futures on weather concerns
· USDA to release planting intentions and quarterly stocks on Friday, “cheat sheet” on following page
· Crop scout Cordonnier keeping Brazil and Argentina corn/soybean production estimates unchanged
· US gasoline traded at a record premium to ethanol yesterday; Gas prices topping $4/gallon in most states while ethanol stocks remain more than adequate
· US tax officials will not penalize farmers who could not properly file their taxes because they had accounts at bankrupt broker MF Global (article below)
· Frost likely to affect northern/central Corn Belt and HRW wheat areas beginning next Wednesday
· Outside markets mostly mixed this morning, opening calls mostly in-line with overnight closes
Producers of corn, soybeans and wheat have 3 days to shore up their marketing ahead of Friday’s report. We continue to advise that corn and soybean growers own PUT spreads; Buying an at-the-money option and selling an option below you crop insurance level. The gap between current prices and your crop insurance coverage is what needs to be protected. The risks associated with this report are enormous, as limit moves in either direction are par for the course. Call the office with questions or concerns.
As always, call the office with questions or concerns.