E Hedger Closing Grain Commentary 2/22/10
Feb 23, 2010
|Apr live cattle
|Apr lean hogs
Corn, soybeans, and wheat all closed higher to start the week. In the absence of any real news the chatter has turned to slightly bullish information. There is talk about rains delaying harvest in parts of Argentina and Brazil. Also, that snowfall and winter conditions will lead to flooding in the upper Midwest this spring. Add in the lower dollar and strong Friday finish it led to a high range close in the grain markets. For the most part today’s action was due to short covering and technical buying. The commitment of traders report has continued to show funds holding large short positions in soybeans and wheat. We find today’s gains encouraging in that corn and soybeans are approaching price levels from the January report, such as $4.10-4.20 December 2010 corn and $9.50-9.80 November 2010 soybeans. For many producers these are profitable levels.
There was also talk today about the USDA re-survey. The late harvested crop is thought to be smaller than what the USDA currently has written down. Until these numbers are released the short side of the market may remain cautious. However, regardless of the findings there are bushels that will have to be moved as temperatures heat up and quality becomes a larger concern. This will put pressure on the corn market on further advances.
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