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.
Slow News Day, Old Crop Corn Supported...
Apr 04, 2012
· Grains mixed overnight; Old crop corn showing continued strength while soybeans take a breather from recent uptick; Wheat has been weakest leg of ag complex despite friendly numbers from the USDA last week
· Informa increasing corn acreage estimate to 96.4mil (previous 95.5) and decreasing soybean acreage to 74.2mil (previous 75.1) at a conference in Chicago this week
· Brazil analyst lowering soybean estimate to 65.2mmt vs. previous 67.1mmt; Corn estimate increased to 64.6mmt vs. previous 63.7mmt
· Outside markets mostly soft today; US$ higher
· Export Sales tomorrow at 7:30am CST; No trading on Friday in observance of Good Friday
· FOMC outlook yesterday caused broad sell-off in many financial markets yesterday; Some traders may have noticed an “odd” settlement in corn futures yesterday as a result of the volatility
· Old crop corn contracts have finished higher the past 3 days on friendly USDA numbers; Most technicians turning to a more friendly stance; Dec corn still trading below the range that traded from Jan 1 through the end of March
· Slow news day in grains today
New crop corn prices are hardly “out of the woods” despite friendly numbers from the USDA last week. Although we believe that the odds of a rally to the 5.80-6.00 area are now increased due to friendly USDA data, there is absolutely no guarantee that producers will have the opportunity to price new crop production at higher levels anytime soon. The prospect of 95+ million acres planted, assuming that about 1 million are switched into beans, is a big weight on the market. PUT spread strategies are still a viable option for producers looking to protect the gap between current levels and their crop insurance coverage without the prospect of margin calls. Call the office for specifics.
As always, call the office with questions or concerns.