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 Mixed, Outside Markets Under Pressure...
Apr 23, 2012
· Grain markets were mixed overnight; Soybean volatility late Friday afternoon not extremely surprising given option expiration
· Corn producers looking at a fairly open planting window early this week, although colder temps will return to northern areas; Some mild frost may occur but shouldn’t be seen as a major threat
· China’s Sinograin may boost imports of US corn according to Reuters article; Trader’s believe that the group signed a contract to buy 500,000mt of US corn last week
· EU and China manufacturing data disappointing overnight; US$ strong and equities sharply lower as a result
· Rumors of more China soybean purchases on Friday; Traders believe 3-6 cargoes of US beans were purchased
· Crop Progress this afternoon; Traders looking for corn planting near 29% complete vs. 17% last week; Avg for this date is 23%
· Export Inspections today at 10am CST; Export Sales on Thursday at 7:30am CST
We’ll continue to reiterate the idea that corn prices will have a tough time rallying without a significant weather threat. Near ideal weather conditions trump the China demand story, in our opinion. There is certainly a possibility that the USDA could lower old crop stocks drastically on the May report, however we’re not banking on it just yet. Soybeans continue their recent strength on China demand and rumors of export issues in South America.
Today could very quickly turn into a “risk-off” day in commodity markets, as outside markets are very negative. The combination of sharply lower equities along with a rising dollar and lower crude is sometimes enough to push grain prices.
As always, call the office with questions or concerns.