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.
Grains Look for Follow-through Buying
Mar 16, 2012
· Grain marginally lower overnight after strong closes yesterday; May corn finished over key resistance level at 6.66 yesterday while Dec was able to close above 5.70 for the first time since March 5th
· Soybeans look to continue their run higher on concerns over China demand and the possibility of low acreage domestically
· Many traders continue to question the validity of USDA’s current old crop stocks numbers; some believe they’ll be reduced drastically by USDA on the 30th
· Open interest in Sept PUT options on corn has risen drastically since the beginning of March; Many believe early planting will lead to early harvest and bigger supplies earlier in the year; Sept corn currently trading 34 cents over Dec
· Argentina farmers have begun soybean harvest, however heavy rains there have slowed efforts
· China corn futures up sharply overnight DCE exchange, enormous volume noted in Sept contract
· Outside markets mixed; US$ lower, equities higher, crude higher, metals sharply lower
Many technicians will look for follow-through buying the in the grain markets today. We’d be cautious as a bull, as profit taking ahead of the weekend is possible. New crop corn continues to be the weak link in the ag complex, however another solid close today may convince us to become a little more friendly between now and the March 30th report.
We believe that some sort of risk management strategy on new crop corn and soybeans is a must headed into March 30th. Call the office for personalized recommendations.
As always, call the office with questions or concerns.