Walsh Trading: Afternoon Grain Comments
Andy is a seasoned grain market analyst and the senior account executive at Walsh Hedging. His main focus is assisting producers and end users to better hedge their investments through his various market strategies over his years of experience working on the grain floor.
Walsh Commercial Hedging 12/4/12
Dec 04, 2012
Without much fresh news in the complex today it looked like it was going to be a “risk off” trade, especially for the bean complex, but after the spot January bean contract failed to take out its 1st support level of $14.35, the bargain buyers came out at 11:45 with January beans finishing the day up 1 ¾ at $14.55 ½. There is talk that China bought 2-3 cargoes of soybeans off the PNW for January shipment which added support to the overnight markets. The strong demand of US beans, meal, and oil exports continues to provide the soy complex support. The weather in South America has news for both the “bear” and “bull” camps. For the most part, the weather in South America, specifically Brazil looks mostly favorable. Brazil could use a little more rain while Argentina could definitely see less rain. Argentina is scheduled to see another 1-3 inches of rain this week and has seen above normal rainfall for the last 4 months. This has some in the trade thinking producers in Argentina might switch over to planting soybeans instead of corn which has added support to the corn complex in the last couple weeks. However, overnight Taiwan bought 60,000 MT of corn from Brazil and today Japan also purchased 60,000 MT of corn from Brazil at a $25/tonne discount to the US which weighed on the corn complex. March corn did rally a bit on the close to finish down 2 ½ at $7.52 ¼ and continues to hover over that $7.50 mark. The corn complex will likely keep its choppy two sided trade going until it’s confirmed that exports are picking up, or in my opinion corn most likely won’t see direction until the January Final report. The “holiday” markets are fast approaching thus bringing lower volume and choppier trading days. March wheat finished down 4 ¼ at 856 ½. Wheat is seeing support from the continued dryness in the Plains and quality issues in Argentina from the heavy rains but overall the wheat “bulls” want to see export demand pick up. Yes, the US had their first sale with Egypt over the weekend but the US isn’t the only player in town yet after the Egyptian tender showed that Romania, France, and Argentina cargoes were also offered.
Give me a call at 800.993.5449 or sign up for my free hedge letter at the link below.
Sign up for the Walsh Friday Hedge letter
Walsh Trading is a division of HighGround Trading Group, Inc. ("HTG"). HTG is registered as an Introducing Broker with the Commodity Futures Trading Commission and an NFA Member. Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS All information, communications, publications, and reports, including this specific material, used and distributed by HighGround Trading Group Inc. (“HTG”) shall be construed as a solicitation for entering into a derivatives transaction. HTG does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.