Higher Overnight, Corn OI Down 25% from Last Year
Dec 05, 2011
· Grains higher overnight led by soybeans, which have caught a bid as of late on China purchases as well as dry forecasts for the South American crop; Some also eyeing abnormal ratio between the 2012 contracts which clearly favor corn planting versus soy planting from a producer perspective
· Big Australian feed wheat supply seen as being detrimental to US export demand for corn
· Fund traders again lightening positions in corn according to Friday’s COT report; Funds cut long corn position by 13k to 70k, Trimmed net short by 4k to 82k, Trimmed net short in soybeans by 1k to 22k
· USDA to issue Crop Production/WASDE on Friday, pre-report estimates to follow; December report generally not a big market mover
· Open interest in corn at 1.114 million contracts, was 1.503 million last year, a 26% drop year over year
· Informa to release world production estimates this morning
· Feeder cattle traded into all-time highs on Friday
· Outside markets mostly supportive to grains this morning with US$ lower, crude and equities both higher
Look for choppy markets ahead of Friday’s USDA report. Corn, soybeans and wheat maintaining a bearish setup as far as charts are concerned. Drop in OI along with fund liquidation is an indication that the large trader may simply not be interested in the corn market for the time being. The recent rebound in soybean may be attributed to the SAM weather, however the market clearly remains in a downtrend.
Straits Financial provides futures/options brokerage services to farms, feedlots, elevators and processors. Call Joe Vaclavik today to be added to our email list! (312) 462-4438
