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Standard Grain

RSS By: Joe Vaclavik

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.

 

Favorable Weather Pressure Corn and Wheat Markets...

Mar 22, 2012

 

·         Grains lower overnight led by soybeans; A close lower today in corn would be the 4th day in row lower after Friday’s “bullish” close
·         Soybeans holding together in recent trading range after a setbacks on Monday/Tuesday; Soy vs. corn spreads rallying even further; CZ vs. SX ratio now near 2.37 : 1
·         Outside markets mostly negative for grains this morning; Crude/equities/metals sharply lower with US$ higher
·         Clearly, prospect of early planting and favorable conditions weighing on corn prices; Many analysts now believe that some last minute acreage switching could be done as soybeans gain on corn; Still, most analysts looking for soybean acreage somewhere south of 75.5mil
·         Bearish Chinese manufacturing data partially responsible for this morning’s outside market break, possibly adding to grain pressure
·         EIA weekly ethanol production at 893,000bdp up 1k per day from previous week; Ethanol stocks at record 22.7mil barrels
·         Export Sales this morning at 7:30am CST, pre-report estimates:
o   Wheat               400k-500k
o   Corn                   600k-850k
o   Soybeans           900k-1.1mil
·         Opening calls marginally lower across the board
 
Support in May corn should be found in the 6.25 to 6.30 area. The soybean charts look as if the recent price decline is temporary, as no major chart damage has been done. Corn growers should still consider PUT options on the December contract as hedges. The 5.50 PUTs are trading near 50 cents today, allowing a floor to be set at 5.00. Again, selling a 2nd PUT below your crop insurance levels is a good strategy to offset some of the cost and increase your price floor. Call the office with questions. 
 
As always, call the office with questions or concerns.
 
Regards,
Joe Vaclavik
(312) 462-4438
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