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.
Mixed Overnight, Traders Contemplate Report Possibilities
Jan 10, 2012
· Grains torn between S. American rains this week and a potentially bullish USDA report on Thursday morning; Brazil raising estimate for soy production overnight
· Brazil government cuts corn crop forecast to 59.2mmt from 60.32mmt in Dec; Brazil soybean crop estimated at 71.75mmt, up .7% from last month
· Despite rains this week in the driest areas of S. America, there are not any follow-through rains in the forecast for next week
· USDA to close 249 offices in an effort to save money; Half of the closing will be local "county" offices that deal with farmers, Ag Sec Vilsack announced yesterday
· USDA report Thursday AM at 7:30am CST; Pre-Report estimates in following pages
· Farm leaders in Argentina calling on gov’t to suspend export taxes to help struggling farmers follow the worst drought in recent memory
· Outside markets seen as positive for grain trade this morning, crude/equities/metals sharply higher with US$ lower
Most traders believe that Thursday’s USDA report will be friendly, however it seems that there is a growing bearish sentiment for the longer term. Traders are now discussing the possibility of 94-95 million acres of corn in 2012 and the potential price implications given a number of different weather scenarios. Farmers: Your risk that is that 95 million acres is planted and weather is normal. A scenario such as this would likely result in sharply lower prices; Prices that will likely fall below your breakevens and insurance levels.
Reminder: Be sure to consider attending the first ever ‘Trade the Farm’ seminar in Demotte, IN on February 17th! Click the link below for more information.
As always, call the office with questions or concerns.
The information contained herein is the opinion of the writer or was obtained from sources cited within the update. It should be noted that the impact on market prices due to seasonal or market cycles and current news events may be reflected in market prices.