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.
Grain Markets Quiet to Start Week
Mar 12, 2012
· Grains mixed to start the week after Friday’s wild report day session; May soybeans charting a doji star reversal pattern on Friday, closing 15+ cents off the highs (chart next page)
· Dec corn rallying post-open on Friday on Chinese purchase rumors; Floor rumors sparked quick 10 cent rally ahead of a sell-off later in the day
· Warm weather across most of the corn belt has many producers looking at early planting, a far cry from the last 2 years in which many corn growers planting much later than normal due to wet conditions
· Informa projecting US Corn acreage at 95.5mil, up from their previous estimate of 94.7; Soybean acreage projected at 75.1mil, up from previous 74.5
· Outside commodities mostly lower with gold/silver/crude lower, currencies mostly flat
· Export Inspections today at 10am; Export Sales Thursday at 7:30am CST; Planting Intentions March 30th, 7:30am CST
Corn producers caught some good luck on Friday, as the market decided to hold together despite a non-event report. As we’ve said many times before, worst case scenario for corn growers at this point would be a sell-off into the acreage report at the end of the month. December PUT options are still cheap. The $5.50s are trading in the 45-46 cent area, giving producers an opportunity to set a floor above $5.00 with no ceiling. We’d like to have the opportunity to buy 560s or 570s at a similar price ahead of the 30th.
It’s tough to say whether or not we’ll see any follow through to Friday’s reversal in soybeans, as such patterns have become decreasingly reliable in recent years. Fundamentals are friendly while technicals are desperate for a pull-back. We wouldn’t be surprised to see a slight correction in the corn vs. soybean spreads sometime ahead of the report , as the spreads between new crop corn and soy have been one-directional for several weeks.
As always, call the office with questions or concerns.