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.
Rebound Overnight, Russia Rumors/Weather Rally Wheat...
Jan 31, 2012
· Corn and wheat rebounding from yesterday’s break while soybeans lag behind; Trade growing concerned over issues regarding wheat in Russia and Ukraine
· Combination of harsh winter weather, which has slowed cash grain movement, along with rumors that Russian government will take measures to restrict grain exports, have the trade concerned; Wheat bull spreading heavily and showing strength in the front month contracts
· Outside markets mostly positive for grains with US$ lower, crude sharply higher and back over $100, equities higher
· Japan corn imports from EU hit a record 1.5mmt due to high US prices, but still seeking to buy 1.0mmt of US corn for Jan-March period
· ADM quarterly profits fall 89% as the ag giant made less money on its various commodity businesses
· Heavy t-storms hit some of Argentina yesterday, but missed many key growing areas; Scattered storms to continue through Friday; Significant rain/snow event headed for US plains around Thursday night, which could affect cattle and wheat areas
The soybean market certainly seems to be convinced that recent rains in S. America have had a positive impact on the crop, although many crop scouts and agronomists agree that there is irreparable damage. Wheat strong on Russian rumor and weather issues both domestic and abroad. A major wheat rally could go further than you might guess as funds are loaded up short. Corn is hanging around recent highs. We believe that Dec ’12 corn could see a nice run higher over the next couple of months. There needs to be 95+ million acres of corn this spring, and it’s the market’s job to ensure that it happens. We’re more neutral the soybean market than anything, low US acreage and SAM weather issues are both supportive. Today might be a good day to stay on the sidelines.
Note: I will be in Nashville at the NCBA Convention on Wednesday and Thursday this week. I will be in Dayton, OH to speak at the Brugler Marketing event on Friday and will return to the office on Monday. I am readily available via phone or email.
As always, call the office with questions or concerns.