Dustin works with a wide net of large producers throughout the Midwest. His analytical market approach and objective hedge strategy development is specific to the needs of every individual.
Volatility from Report Aftershocks
Apr 02, 2013
Grains and oilseeds have found a day of reprieve after two days of heavy sell pressure. May corn closed 1 ¾ cents lower, May soybeans 3 ¼ cents higher, and May wheat 6 ¾ higher.
We are still feeling the aftershocks of the report with a wide-range, double-sided market today. What appeared to be a "dead-cat-bounce" overnight was immediately met with heavy sell pressure which leads me to believe the liquidation isn’t necessarily over yet.
May Corn 15-Minute Chart
We know that there is a large net-long corn position underwater. Open interest (open contracts traded) actually rose on Thursday but declined in an equal fashion on Monday. There were no USDA sale announcements this morning even after the near dollar break in corn and 63 cent break in soybeans in just two trading sessions. Will demand come in fast enough to account for the additional bushels? The market has done its job rationing and now we are possibly looking at a 900 million to 1 billion bushel corn carryout this year. That could put extra downward pressure on new crop, especially with 97.28 million acres of corn expected. For now we will have to watch the Commitment of Traders report for fund position trends as well as the 14 day outlook as any favorable planting weather could add to the weakness or vice-versa should there be delays. Have a great week!
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