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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.

 

Grain Mixed Overnight, Export Sales at 7:30am CST...

Jan 20, 2012

 

·         Grains giving back a little bit of yesterday’s gains overnight; Spot month corn trading up to 6.10 ¼ overnight before selling off; March beans trading up to 12.04, but look to close the overnight session in the mid to low 1190s
·         Chartists still looking for more downside in grains, as yesterday was a test of the upper end of the range today; Close below last week’s low of 5.99 ½ in March corn would be a negative sign from a technical standpoint
·         Export Sales this morning at 7:30am CST, estimates:
o   Wheat                         300k-450k mt
o   Corn                             550k-750k mt
o   Soybeans                      550k-750k mt
·         International Grain Council lowers world soybean production estimate slightly to 256.4mmt, which would be down 4% from last year’s record crop
·         Argentina gov’t decreased estimate for soy plantings to 18.8mil/hect from 19.0; Corn planting estimate raised to 5.0mil/hect from previous 4.9
·         Mato Grosso, Brazil’s #1 soybean province, continues to see harvest delays due to rains; Forecast calling for more rain through next week
·         Weekly ethanol production at 941,000bpd, down 3k from previous week; Stocks at 19.5mil, up 800k
·         Cattle on Feed out this afternoon; Estimates:
o   On Feed           103.3%
o   Placements     94.2%
o   Marketings      97.2%
·         Outside mostly negative for grains, but no major movement
·         Informa to release planting estimates for ’12 this morning around 10am CST
 
A failure of yesterday’s rally today would certainly be a negative sign for the bulls. On one hand, many believe end-users need to buy this break. On the other hand, there are still a huge number of longs under water from the Dec-Jan rally that have not liquidated according to open interest numbers. This could be a cause for further downside. The “USDA over estimated the ’11 crop” crowd will certainly butt heads with the “97.5 million acres of corn” crowd over the coming months. The crazy thing is that they both might be right. Have a great weekend!
 
As always, call the office with questions or concerns.
 
Regards,
Joe Vaclavik

(312) 462-4438    

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