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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.


Funds Continue to Sell Grains

Nov 29, 2011


·         Grains mixed to higher overnight after yesterday’s bounce; Outside commodity markets somewhat supportive with $US down again
·         Winter wheat rated 52% good-excellent vs. 50% last week; USDA issued no harvest progress report for corn despite delays in the ECB
·         CFTC Commitment of Traders Report
o   Funds cut longs in corn by 47k to 83k; Increase net short in wheat by 12k to 87k; Increase net short in soybeans by 18k to 24k
·         Funds now holding smallest long in corn since July; Short wheat position biggest in 6 years;
·         USDA Risk Management Agency announced that US producers will pay 7% less for crop insurance on corn and 9% less on soybeans on average in 2012; New rates reflect updated system and methods of setting rates
·         Bill to scrap the Canadian Wheat Board monopoly has advanced; Farmers would be able to forward contract wheat if passed; CWB has done marketing for all Canadian wheat for 60 years
The short fund position in wheat is becoming over-extended in our opinion. We look for a significant short-covering rally at some point during in the 6-8 week period. Fund traders clearly exhibiting a bearish attitude towards the ag markets despite massive price break. Many corn producers now looking at Dec ’12 contract. We look for a rally back to the $6 area after the new year.

Straits Financial does futures/options brokerage for farms, feedlots, elevators and processors.  Call Joe Vaclavik at (312) 462-4438. 

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