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.
Slight Rebound Overnight, Traders Await Friday...
Mar 28, 2012
· Grain markets attempt a rebound overnight after yesterday’s collapse; Corn and wheat moving towards lower end of recent ranges yesterday while beans enjoyed a minor correction
· USDA to release Planting Intentions and Quarterly Stocks on Friday morning at 7:30AM CST; Trade looking for corn acreage near 94.7 and bean acreage near 75.0
· Yesterday’s trade saw a significant correction in corn and soybean calendar spreads, both of which have been very strong as of late
· Slow news day today overall, outside markets mostly mixed with some weakness in major commodity markets
· EU futures backing off after forecast for drought stricken areas
· Possible frost next week shouldn’t have much of an effect on quickly developing winter wheat crop, most areas will not see a hard freeze
· Many corn traders continue to tout the possibility of a sharply lower corn stocks number from the USDA; Strong cash market and inverted spreads are generally indicative of low stocks
· No major increase in option volatility has yet been seen ahead of Friday’s report
· Rice futures traded to 3-month highs yesterday on concerns that acreage would be light
Grain producer have 2 days to shore up their marketing and hedge any production that is at risk. The only we know about Friday’s report is that it generally comes with massive volatility, good or bad. Growers of corn and soybeans should look to protect the gap between current price levels and the level of their crop insurance.
Attempting to predict the results of Friday’s report are futile. You may be right on the direction of the market, but the risk of loss in being wrong is enormous for grain producers in our opinion.
Need to hedge your production ahead of Friday's report? We can have you ready to go by this afternoon! Call me directly at (312) 462-4438.
As always, call the office with questions or concerns.