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.
Down Overnight, Rain Forecasted for South American Corn/Soy Areas
Dec 21, 2011
· Grains taking a breather overnight after a strong start to the week; Short-covering and fund buying seen on Monday/Tuesday on South American weather concerns
· Rains forecasted in Brazil/Argentina later today and tomorrow; Forecasters still undecided on whether or not weekend rains will hit key areas
· Outside markets mostly positive this morning with US$ slightly lower, crude and equities slightly higher
· Chinese corn imports in Nov were 244,756mt, about twice last year’s amount; Jan-Nov period saw total imports at 1.18mmt, down 24% from last year
· Chinese soy imports in Nov were down 34.8% from last year; Soy imports during Jan-Nov period total 47.2mmt, down 4.3% from last year
· Barclay’s issuing a report indicating that investment in commodity funds rose $3.7bil in Nov; Total under management now near $426bil
· Cattle prices soft yesterday and this morning despite major winter storm event across plains
The South American weather issue could turn into something bigger, but may now be nothing more than an excuse for a short-covering rally in the grain markets. We wouldn’t be surprised to see a run higher initially, however we believe this will ultimately be a rally to be sold in corn and soybeans. High volatility in the Feb corn options especially leads us to believe that traders are looking for more of a market moving report in early January from the USDA.
As always, call the office with questions or concerns.