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.
Corn Faces Resistance at $6.26/March
Dec 22, 2011
· Grains mixed to higher overnight; Impressive strength again yesterday on short-covering, technical buying and growing concerns over South American weather issues in certain growing regions
· Some analysts dropping production estimates for Brazil’s southern states as drought concerns grow
· Weekly ethanol production at 943k bpd, up 5k from last week; Ethanol stocks at 17.7mil/bar, up 600k
· USDA Export Sales this morning at 7:30am CST, Pre-report Estimates:
o Wheat 300k-500k mt
o Corn 450k-675k mt
o Soybeans 400k-600k mt
· Outside markets mostly supportive; Crude/equities higher, US$ slightly lower
· March corn looking at technical resistance at 626, which is the 50% retracement from the early November highs to the mid-December lows
This would be the 5th up day in a row if corn were able to close in the green today. Short-covering due to weather issues seems to be the main culprit. We’re going to stay away from the short side for the time being, and let the charts do their job. We’ll likely look to buy a break in March corn in the 600-605 area. Wheat should continue to follow corn for the most part. Soybeans now trading nearly 60 cents removed from recent lows. We remain bullish the grain markets long term and believe that there will be better opportunities in the Feb-April timeframe for producers to price the ’12 crop.
As always, call the office with questions or concerns.