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/Soy Sharply Higher Overnight
Dec 19, 2011
· Grains shooting higher overnight on South American weather threats and short covering; Soybeans trading 50+ cents removed from last week’s lows and flirting with major resistance in the 11.50 area in the March contract
· S. American forecasts call for some rains later this week; Most believe no real damage has been done to crops thus far
· Funds cut long in corn by 1k to 50k; Covered 8k of shorts in beans, now short 15k; Increased short in wheat by 4k to 83k
· China buying corn from domestic farmers in a bid to refill government controlled stockpiles
· India looking for record wheat crop in 11/2; Favorable weather and higher acreage seen
· Cattle placements rose on Friday Cattle-on-Feed report after analysts had predicted a decline; Some see this as being bearish cattle and bullish feed grains
· Asian equities drop hard on death of North Korean leader Kim Jong Il, little effect seen on US markets
· Export Inspections this morning at 10am CST; Census Crush and Export Sales on Thursday morning; Markets open Friday, closed Monday
In general, early-season weather rallies are to be sold. We view this as more of a technical bounce as the weather threat in SAM seems minimal at this point. Rains forecasted as early as Friday/Saturday. Producers can use this opportunity to sell some old crop cash grains re-own with call options as long as basis levels remain favorable. Friday’s cattle-on-feed numbers should be an indication from the USDA that feed number could be up in future reports.
As always, call the office with questions or concerns.