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A Wild, Volatile Week in the Grain Markets

February 25, 2011
 
 

This information is provided by Scott Harms - Archer Financial Services, Inc. 800-933-3996.

The example of the volatility in the grain markets could not likely be more pronounced than what we saw this week. 

The corn market started the holiday shortened week on Tuesday with a limit down trade and finished the week by trading limit up during the session. The biggest factor in the markets’ weakness on Tuesday and Tuesday night was a significant reduction in corn and soybean open interest. Corn open interest declined over 230,000 contracts and soybean open interest was down nearly 140,000 contracts after Tuesday’s trade. 
 
Some analysts attributed this decline to a movement by the funds away from the grains and into energies and precious metals. Whatever the reason, they perhaps ended the week by reinvesting in grains. 
 
The outlook is the same for corn as it has been in recent months, as little signs of rationing have developed. The weekly export number in corn was a marketing year high. It is as important as ever to develop an overall marketing plan, so that you do not get jerked around by these wild swinging markets as some analysts have. 
 
Fasten your seatbelts as this week may only prove to be a precursor for what we should expect this spring and summer.
  

2 11 11 market chart

(click to enlarge)

 

2 25 11 COT

(click to enlarge)

 

 

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