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Walsh Trading: Afternoon Grain Comments

RSS By: Andy Kopale, AgWeb.com

Andy is a seasoned grain market analyst and the senior account executive at Walsh Hedging. His main focus is assisting producers and end users to better hedge their investments through his various market strategies over his years of experience working on the grain floor.

Walsh Commercial Hedging 4/30/12

Apr 30, 2012

Good afternoon. It was a choppy two sided trade in the complex today until 1:00 hit. November beans surged higher near the close and the buying then spilled over into the grains. New crop November beans finished at 1381, up 19 cents for the day. July beans settled at 1505 ½ up 12 cents. Overnight, the bean complex was pressured by the fact there were 752 deliveries against May soybeans. Traders were expecting few or no deliveries. There was another sale of 220,000 tonnes of US beans to China for the 2011/12 season. The weekend Commitment of Traders (COT) report showed Non-Commercial traders were net long a record high 247,932 contracts, an increase of 3,774 for the week. Both soybeans and meal are showing a positive buying trend but have reached overbought status. Soybean plantings came in at 12% planted which was exactly what the trade was looking for.   Once these funds decide to start selling beans, be prepared for a sharp break in beans. I would strongly urge producers of beans to have some sort of protection in place through option strategies to protect your investment and a tremendous amount of revenue.

Wheat and especially corn was supported by the surge in beans. July wheat finished up 4 ½ at 654 ½. July corn was up 8 ¾ at 634 ½ and new crop December corn closed up 4 ½ at 543 ¼. Corn plantings came in at 53% which was well above the 42%-46% the trade was looking for. Two big numbers that jump up at me are Iowa and Illinois. Iowa went from 9% to 50%. Iowa was 7% complete this time last year. The five year average for Iowa is 32%. Illinois farmers already have 79% of their corn in the ground! The 5 year average for Illinois at this time of the year is 29%. Looking forward, the weather outlook appears good with warmer and wet weather over the next week but not enough rain to cause major slowdowns in plantings. All in all, I would expect this impressive corn number to weigh on the new crop in the near term unless soybeans continue to move higher or outside market forces push corn higher.
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Walsh Commercial
Futures and options trading involves substantial risk. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. In no event should the content of this letter be construed as an express or an implied promise, guarantee, or implication by or from Walsh Trading Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided in this correspondence is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. The risk of loss in trading commodities can be substantial. You should carefully consider whether such trading is suitable for you in light of your personal circumstances and financial resources. Only risk capital should be used.
 
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