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.
Bears Get a Lower Trade Overnight, Outsides Negative...
Jan 30, 2012
· Grains lower overnight, correcting from last week’s rally; Outside markets mostly negative for commodities with US$ higher and crude/equities lower
· Some forecasters calling for better rains for Argentina and S. Brazil, some traders concerned with Russia/Ukraine winter wheat weather
· Market chatter continues with talk that Russia will restrict/limit grain exports in some way this spring
· Poor weather preventing grain exports from ports in Ukraine/Russia; Severe frost slowing the pace of cash grain movement
· Managed money bought soybeans and sold corn in the week ending last Tuesday
· Last week’s fed decision to keep interest rates near zero for 3 years certainly providing underlying support for commodities as a whole
· Interior cash grain markets remain strong; Farmer selling improved slightly late last week on the seldom-seen coincident of a rally in both basis and futures
The bears will get their lower open today, and the lower trade could hold throughout the day. Remember, bull markets open lower and close higher. This will be a good test. I believe that even if we were to hold a lower trade today, there is still major potential for March corn to test resistance in the 6.60 area. Not much has changed fundamentally, other than some run-of-the-mill outside market movement. March soybeans looking to test $12 psychological support this morning. It looks as if some short covering is still being seen in wheat, as spreads rally. Thinking ahead, we wouldn’t be surprised to see some sort of “Turnaround Tuesday” action tomorrow IF the lower trade holds today.
Note: Be sure to stop by the Straits Financial booth at the National Cattlemen’s Beef Association Convention in Nashville this week! I will at the booth for the most of the day on Thursday.
As always, call the office with questions or concerns.