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 Lower Overnight, Soybeans Firm
Feb 27, 2012
· Grains mostly lower overnight led by nearby corn; Soybeans continue to hold together well while wheat follows corn
· Outsides mostly negative for grains today, US$ higher and crude $1+ lower, equities also lower
· Soybean export sales on Friday were the largest of the marketing year; Beans continue to gain on corn consistently; Trade is either trying to "buy back" some bean acreage, or is conceding that corn acreage will be enormous at soybeans’ expense
· July vs. Dec corn spread closing at the highest level since September on Friday as new crop corn falls
· Storms to affect key areas of Argentina, S Brazil and Paraguay early this week
· Slow news day today
The USDA released their Outlook numbers last week. Corn growers around the country are very concerned over the prospect of a 14+ billion bushel crop and the price implications that would come along with it. USDA projected corn carryout to balloon to 1.6bil/bu for 12/13 according the balance sheets released on Friday. They believe that the ethanol industry has plateaued and will see limited growth. Granted, the acreage surveys have not been turned in and there are still a few weeks until the March 30th prospective plantings report; however the USDA info is cause for concern at the very least. The fact that their data is so bearish may be a shot across for the bow for producers who have done no marketing for the 2012 crop. Call the office or send an email for ideas on hedging the 2012 corn crop ahead of the March report.
As always, call the office with questions or concerns.