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.
Up AGAIN Overnight...
Jan 26, 2012
· Grains up sharply overnight in sympathy with lower US$ and higher outsides; Crude over $1 higher; Technical momentum building in corn, soy and wheat
· Yesterday’s decision by the fed to keep unchanged indefinitely is certainly supportive to commodities; Some believe rates could stay extremely low for the next 3-4 years
· Export Sales this morning at 7:30am CST, pre-report estimates:
o Wheat 500k-700k mt
o Corn 650k-850k mt
o Soybeans 700k-850k mt
· Trade focusing much less on SAM weather, now more concerned with acreage allocation and the debate over old crop corn supplies
· Dec ’12 corn trading near 5.70 overnight, many producers seem to be ‘chomping at the bit’ to sell $6 futures
· Rumors floating around that Russia will restrict grain exports; Traders looking for Russia gov’t to impose duties starting in April, according to sources
· Potential acreage shortage should keep a floor under the soybean market; Neither corn, soybeans or wheat are ‘overbought’ as far as technical indicators are concerned at this point
· Daily Number: Support Resistance
o Corn 6.25 ½, 6.21 ¼ 6.39 ½, 6.46
o Soybeans 12.08 ½, 12.03 ¾ 12.29 ½, 12.37
o Wheat 6.29 ½, 6.21 ½ 6.49 ¾, 6.63
Look for a strong open today as weak shorts blow out of positions. Major resistance in March corn doesn’t show up until the 6.60 area. Stochastics still point higher. Cash grain movement light, however basis levels backing off just a little bit yesterday. Soybeans, despite dragging relative to corn and wheat as of later, could be a real sleeper here once the market starts to think about acreage a little bit more. We think market action could return to “normal” this year in the corn market if good weather occurs; meaning that the market could put in the yearly highs and present selling opportunities for producers in the Feb-June timeframe. We like being long, but traders must “keep it tight” at these higher prices.
As always, call the office with questions or concerns.