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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 for more information.


Grains Hold Recent Lows...For now

Dec 15, 2011


·         Grains slightly higher overnight; Corn and soybeans both tested recent multi-month lows yesterday while crude and other outside commodities collapsed
·         Outsides are mostly supportive today to begin, however we wouldn’t rule out more downside in the markets that took the biggest hits yesterday (gold, silver, crude)
·         Export Sales this morning at 7:30am CST; Pre-Report Estimates:
o   Wheat                                   300k-400k mt
o   Corn                                       400k-600k mt
o   Soybeans                             400k-600k mt
·         China-based commodity analysts doesn’t see the government there adding to corn stockpiles through imports until LH of 2012
·         Russian grain analyst SovEcon raised estimate for Russian grain output to 92mmt from 90mmt previously
·         EIA weekly ethanol production at 938k bpd last week, down 16k from the previous week; Ethanol stocks at 17.1mil/barrels down 800k
·         Canadian Wheat Board will ask courts to block a bill that would end its 68-year-old grain monopoly
·         Rains in the RGDS state of Brazil, will continue to be dry for a couple of weeks as planting wraps up; Rio Grande do Sul is the 3rd largest growing state in Brazil
The trend in the grain markets remain lower, bottom-pickers beware.   Most technicians are looking for a break below 5.80 in March Corn sometime during the next couple of sessions.   We remain friendly both the corn and soy markets long term, however short-term downside appears imminent given the circumstances. With the collapses in gold, silver and crude yesterday, heavy margin-call selling seems to be a reasonable assumption today and tomorrow. Gold is trading below the 200 DMA for the first time since Jan ’09, possibly signaling a trend change in what has been the strongest of all commodities during the past several years.
Joseph Vaclavik
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