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March 2012 Archive for Grain Hedge

RSS By: Brock Schimbeno, AgWeb.com

Grain Hedge is a self-directed discount brokerage that saves farmers money when trading in the futures and options market. For $7 commissions per side producers can execute their marketing strategy with authority, any time the markets trade.

Old Crop Corn Hits Lock Limit -- See What States Lead The Acreage Charge

Mar 30, 2012

Cody and Logan breakdown this morning's USDA Planting Intentions and Quarterly Grain Stock Reports. Tune in for the full report!

95.9 Million Corn Acres, Wheat and Soybeans Come In Low

Mar 30, 2012

GrainTV takes a glance at what we saw in the Planted Acreage and Quarterly Stocks Figures. We will be watching the market open in an hour and breaking these numbers down in detail!

1 hour into the trade:

march30at

We now see old crop corn approaching a limit-up move. Looks like there are still motivated sellers around 640, from the image above you can see 2480 sell orders resting at 644. Take a demo of Firetip today to watch the market and place orders from your home or office!

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THERE IS A SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Export Sales Miss The Mark -- What To Look For In Tomorrow's Big Report

Mar 29, 2012

Brock and Cody discuss this week's export sales report and what producers should be looking for our of tomorrow's USDA Planting Intentions report. Tune in for the full report!

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THERE IS A SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Wheat Market Leads To The Downside

Mar 27, 2012

Brock and Logan discuss a strong start to the winter wheat crop and expectations for Friday's Planting Intentions Report. Tune in for the full report!

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THERE IS A SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Soybeans Making a Last Ditch Effort to Buy Acreage

Mar 26, 2012

Once again, the new crop soybean/new crop corn ratio has reached levels not seen since before last year's planting intentions report.  It is probably too late for soybeans to buy many acres, but they do seem to be making a last ditch effort to capture some much needed acreage.  If there are any planting delays or any replanting to be done, soybeans would undoubtedly grab most of these acres.

Take a look at the chart below from our Firetip trading software.  As you can see, the last time we saw the ratio this high was on March 1, 2011 when it hit 2.373 soybeans/corn.  This ratio tumbled throughout the growing season of 2011 ultimately hitting a low of 1.991 on November 11, 2011.  Since then, the ratio has rallied sharply higher as soybeans were desperately trying to ensure enough acres will be planted this year.  Today, the ratio hit a 13 month high at 2.403.  A poll of analysts shows that the average guess for corn acreage in Friday's report will be around 94.72 million acres and beans around 75.39 million acres. 

If you would like to follow this price ratio, another contract, or a spread chart take a free 10-day trial below.

NC Bean Corn ratio

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THERE IS A SIGNIFICANT RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

GrainTV Week In Review

Mar 23, 2012

Cody and Logan look back at a week that saw the grain market move lower. Tune in for the full report!

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THERE IS A SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS.

FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.PLEASE READ OUR RISK DISCLOSURE.

Grains Continue Lower After Mixed Export Sales Report

Mar 22, 2012

Grains are continuing lower from the overnight session in the early going -- soybeans down 9, down 2 1/2, and Chicago wheat down 3 1/4. Export sales for corn and wheat met trade expectations this morning, but soybeans sales have lagged for the first time in several weeks. Today on GrainTV, Brock and Logan discuss export sales, corn belt soil moisture, and chart landscape on May soybeans. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
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New Crop Soybean / Corn Ratio Reaches New Highs

Mar 21, 2012

The new crop soybean / corn ratio reached new highs, ending the day at 2.377. This is the highest this ratio has been since February 2011. Do not expect to see this ratio impacting the March 30th Planted Intentions Report, since the survey for this report was completed the first week of March. To see areas where soybeans have a chance to pick up planted acres, refer to our cash market commentary from last week.

We saw a divergence between the corn and soybean market today, with corn closing at session lows while bean contracts were propelled higher at the end of the session. Spreads between old crop and new crop contracts remained firm throughout the grain complex, in contrast to a weakening in new crop contracts we have seen in recent weeks.

chart

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

1350 Proving To Be A Battleground For May Soybeans

Mar 21, 2012

1350 is proving to be a battleground early in the trade for May soybeans. It will be important to watch the close for any indication if 1350 will be resistance to moves higher as we approach the March 30th Planting Intentions report. The daily RSI has bottomed out in the near term, now at 64 after moving down as low as 62 yesterday.

Things to note

  • Open interest is down 10,000 contracts from Friday
  • Today's rally is on light volume compared to yesterday's sell-off
  • Managed money is over 150,000 contracts net long, the largest net long position since last September

 

Here is a look at Firetip from a moment ago. You can see that buyers have reclaimed 1350 for now, but there are some indications that this soybean market is top heavy in the near term.

beanAT

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Grains Trade Sharply Lower -- Is The Rally Over?

Mar 20, 2012

Cody and Brock discuss greenness and biomass for the developing winter wheat crop, and some technical levels in the grains. At the time of this post we see corn down 13, soybeans down 18, and Chicago wheat down 9. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Grains Give Back Some of Last Weeks Gains

Mar 19, 2012

Soybeans rallied early in the session only to sell off approaching the close. Below is a 5 minute May Soybean chart taken from the Firetip platform. You can see from the chart that we traded a range around the 50% retracement of the morning's rally, before moving lower. Soybeans were the leader to the upside last week after further downgrades to Brazilian production and continued export strength supported the market. May soybeans are now at 75 on the 27 period RSI, keep an eye on this overbought bean market as we approach the March 30th report.

soybeans

Corn traded near 670 early in the session before finding a rage around 666 as we approached the close. We saw the market turn sharply lower in the last 10 minutes of today's action, trading down to 662 before posting a last trade of 662 1/2. Allendale came out with their corn acreage expectation, and have the 2012 crop estimated at 95 million acres. This was lower than Informa's expectation for 95.5 million acres, but it is clear the market is expecting a lot of acres to go to corn this spring. We will be tweeting @GrainTV as other analysts come out with their findings approaching the March 30th report.

Want to chart these contracts and watch the markets trade live approaching the March 30th Planting Intentions report? Take a demo of our trading platform today!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Front Months Post Big Gains -- New Crop Not Far Behind

Mar 16, 2012

This afternoon Cody and Logan discuss the week's price action. We saw May corn up 29, May soybeans up 37 1/4, and May wheat up 29 1/4. Grain Hedge analysts looked into new crop corn and soybean basis, and find some interesting pieces of data that could affect planting intentions this spring. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Cash Market Points To More Soybean Acres Than Analysts Expect

Mar 16, 2012

Continuing our look at new crop pricing in preparation for the planting intentions report released at the end of the month, we analyze the per acre revenue potential for corn and soybeans. In our study we compared the average county yields throughout the Midwest and multiplied them by the county average new crop cash price. We compared the revenue potential for corn and soybeans observed during March 2011 to the revenue potential we are currently observing today.  In other words, would a farmer today have more incentive to plant corn or soybeans than they did this same time last year?

Speaking strictly in terms of revenue potential, the results show that throughout the U.S., corn has lost an average of $31 dollars an acre this year compared to 2011, while soybeans have given up an average of $12 per acre.

basismap

The latest Informa planting acreage forecast called for 95.5 million acres going to corn and 75 million acres going to soybeans. This a sharply higher corn acreage number from last year, with Informa expecting farmers to seed 3.6 million more acres this year as compared to last year. For soybeans, they expect acreage to stay roughly the same.

However, based on current economic incentives reflected in new-crop futures and new-crop basis quotes across the country, it would seem the farmer’s economic incentive (in terms of revenue potential) don’t support the forecast for such a disproportionate increase in corn acres compared to soybeans. Though both corn and soybean revenue per acre has declined this year compared to last, soybeans have shown relative strength compared to corn. Soybean revenue has become $18 per acre more competitive to corn compared to our observations in 2011. Specifically, we see areas in IN, IL and IA showing improvements in soybean competitiveness by over $35 per acre, while the western Corn Belt continues to favor corn. While we may add corn acres in the western Corn Belt, the heart of the corn producing region may see less corn acres than the market currently anticipates due to the competitiveness of new crop soybean bids in their region. 

This analysis does not factor in the overall change in corn and soybean production costs. However, fertilizer prices have shot up in recent months, which have the added impact of limiting corn plantings as compared to beans. With many farmers postponing their fertilizer purchases betting that prices will decline, the potential for fertilizer shortages may also limit the large corn acreage numbers some analysts expect.

From a revenue perspective our analysis does not support the magnitude of corn acreage forecasted for 2012 while soybean acreage remains unchanged. More importantly, the best yielding areas are currently showing the most revenue incentive to plant soybeans instead of corn. Swapping quality acres for quantity raises even more questions about the likelihood of trend line yield.

Watch the video below to see how Grain Hedge's cash market intelligence can help you get the most out of your cash sales!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Grains Continue Higher After Strong Overnight Session

Mar 15, 2012

This morning's export sales, production revisions from Agroconsult for Brazil, and corn spread charts are all looked at this morning on GrainTV. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Could Corn Spreads Explode This Summer?

Mar 14, 2012

Over the last several weeks many traders and producers have been talking about the spreads between front month and deferred contracts.  A couple issues are surrounding the July-December corn spread in particular.  First, ending stocks appear as though they will be tight once again as we head towards the end of the marketing year and summer.  This will continue to add support to the front month contracts, especially the July and September contracts, when the stocks could be the tightest.  Second, the deferred contracts will be pressured lower by the prospects of a historically large acreage being planted for corn.  If planting gets completed without a hitch and the weather remains favorable, we should see record production sending the market much lower than we stand today.  It seems as though the July-December corn spread will become even larger through summer.

Take a look at the chart from our trading software Firetip.  This chart depicts the July-December corn spread dating back to this time last year.  Exactly one year ago, the spread was sitting at a 63 1/4 cent premium to the July contract.  We did head lower until pipeline supplies became a concern in late summer.  This spread rallied to a high on August 30th achieving a 126 3/4 cent premium for the July contract.  Currently, the spread is sitting at a 92 3/4 cent premium to July after breaking through resistance in the 80 cent area.  If we see the 94 million acres or more planted and quarterly stocks revised lower this spread will likely explode higher.  Considering that the spread is already nearly 30 cents higher than a year ago shows that the market is already concerned about old crop supplies.  If you would like to follow this spread or chart other contracts, sign up for a free demo below!

July Dec corn spread 2

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Export Sales of Corn Reported, But Soybeans Lead to the Upside

Mar 13, 2012

At the time of this post we see May soybeans trading above 1350, up 17 cents to 1351 1/2. Export sales of corn to unknown destinations were reported this morning by FAS, but front month corn is taking the news in stride down 1 1/4. This may be a situation of buy the rumor sell the fact after trade chatters of China purchasing up to 800,000 MT of old crop corn was in the market late last week. This morning Logan and Brock discuss yesterday's crop progress report and look at some soybean technicals. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Keep an Eye on New Crop Basis as We Approach Planting Intentions

Mar 12, 2012

As we inch closer to the planting intentions report at the end of the month, we direct our attention to new crop basis levels. Just within the last week new crop corn basis gained half a cent while soybean basis increased a penny. Throughout the year we have seen both corn and soybean new crop basis continue to make steady improvements. Since the first of the year, new crop corn basis has increased five cents and soybeans have increased nine cents.

 cash2

Comparing this year’s new crop basis levels to last year’s, we are seeing a substantial difference. Taking an average of current new crop basis levels seen this month and comparing them to new crop basis levels from the same time last year, we see corn at an average of 16 cents stronger than last year and soybeans around 9 cents higher on average. Although new crop basis is rising to seasonally uncharacteristic levels, historical analysis would suggest that basis has the capacity to continue improving at least for the foreseeable future.

cash1

New crop soybeans seem to be gathering the most strength from river terminals as well as soybean crushing facilities that have been consistently strengthening their basis. Strong corn basis is more evenly distributed throughout the country and looks especially strong in the fringe areas where additional corn may be planted this season. We do expect new crop basis to maintain its strength going into planting and pollination, but we would warn producers that July will mark an important pivot point to this trend. If 94 million acres are planted to corn this year and weather is cooperative, new crop basis could face strong headwinds in the second half of the growing season.

Watch the following video to learn more about Grain Hedge's cash market intelligence!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Corn Gains Ground After Beans Take A Breather

Mar 09, 2012

Cody and Logan cover the USDA WASDE report and price action from Friday's trade, including rumors that China is back in the old crop corn market. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

What to Expect in Tomorrow's WASDE Report

Mar 08, 2012

This morning Brock and Cody discuss what to expect from Friday's USDA WASDE report. Soybeans continue to pick up ground in the new crop soybean/corn spread, and on today's show Cody and Brock look at some technical levels coming into tomorrow's report. Tune in for the full report!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Grains Open the Night Session Lower, Meats Rebound

Mar 06, 2012

Grains open the night session lower with corn trading down 1 1/4, soybeans down 2, and Chicago wheat down 3/4. Soybeans are pulling back from a day session that saw wild swings -- opening down 6 and rallying back to close out the day session up nearly 15 cents. There were rumors of China back in the bean market early in the trade session, and it looks like beans are still scrambling to pick up acres from corn. Looking at the NC soybean/corn spread it is sitting at 2.297, with 2.3 providing resistance to this ratio on February 27th. Keep an eye on this spread as we move toward the March 30th Planting Intentions report.

Want to place orders, chart spreads, and watch the markets trade in the night session? Take a demo of Firetip and get started!

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tm26

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Grains Trade Mixed -- China Back in Soybean Market

Mar 06, 2012

Soybeans have rallied off the open on news that China is back in the export market. Still unconfirmed amounts, but early chatter is that the sale was for 2 cargoes for April delivery. At the time of this post we see May soybeans up 6, corn down 5 3/4, and Chicago wheat down 11 3/4.

Here in the first week of March it is time to start looking at Crop Progress, and this morning Brock and Logan look at the early condition of the Kansas City wheat crop. Rain and snowfall covering areas of the central plains this winter have helped top soil moisture content, and as a result we have seen significant improvements in wheat condition in Kansas, Oklahoma, and Texas since planting.

Want live quotes and easy order execution on your home computer? Take a demo of Firetip and get started!

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

GrainTV AM Report 03/06/12

Mar 06, 2012

Here is what we are keeping an eye on as we approach the opening bell...

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Grains Open Night Session Lower -- NASS Data Shows Dry Western Corn Belt

Mar 05, 2012

The grains have opened lower to start the night session following a mixed day session in Chicago. At the time of this post we are looking at corn down 2 1/2, soybeans down 3/4, and Chicago wheat down 1 1/2. It looks like a little bit of a turn around from a day session that saw front month corn trade 5 3/4 higher while beans closed down 8 cents. If you are a producer who wants to watch the markets and place orders in the night session, you can take a demo of the Firetip platform shown below by clicking the red button.

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Data released by NASS this afternoon confirms that conditions remain very dry across the western corn belt, with 86% of Northwest Iowa showing short to very short top soil moisture. It looks like conditions have improved since the NASS report in February, but you can see from the table below that we are very dry compared to this time last year. This will be an important factor in the March 30th USDA Planting Intentions report, as dry top soil and a lot of corn-on-corn acres could weigh on yield projections.

TM25

Iowa Moisture

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Positive News for Beans Continues After a Strong Week for Grains

Mar 02, 2012

On Friday's episode, Cody and Brock discuss the price changes for the week as well as some fundamental news that has been supporting the soybean markets.  Also, they take a look at the May soybean chart to identify some potential key price levels going forward.

 

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Will the Markets Keep Plotting Higher In March?

Mar 01, 2012

This year has started off on a positive note as the economy and employment seem to be improving.  The Dow is near multi-year highs at 12,980.30 today, which is down a slight 2.65 points.  Oil slid a little from multi-month highs to $108.60 at the close today down $1.06 this week.  Gold has tumbled $51.90 an ounce to settle at $1,722 today as investors are willing to take on more risk.  The dollar index is up slightly after a recent sell off.  The agricultural commodities have continued to methodically plot higher.

Corn hit the highest point since early January and is up 10 cents to $6.54 on the May contract.  The grain has been pulled higher by a surging soybean market and is trying to ensure enough acres will be planted this spring.  A further reduction to the South American crop has also provided support lately.  It will be important to watch ethanol demand as we move forward.  Export sales were reported as 690,000 MT, which is down 17.9% from last week.

Soybeans have been the leader to the upside for the better part of a month.  The oilseed has gained another 35 ¾ cents to settle at $13.22 ½ on the May contract as of Thursday.  Production concerns in South America continue to underpin and support this market.  Adding to these concerns and support is strong export sales to China.  Export sales were reported as 549,100 MT for this marketing year, which is down 52.6% from last week.  Soybeans should continue to be the leader to the upside as acres are trying to be bought ahead of the Planting Intentions report.

Wheat has taken a back seat to corn and beans lately, but has gained 22 ¾ cents to finish trade at $6.64 today on the May CBOT contract.  A large storm hit many areas of the hard red spring wheat belt which will help the below average soil moisture and pressure the Minneapolis Grain Exchange traded contract.  Export sales continue to be routine and were reported as 414,100 MT, which is down 41% from last week.

The first two months of the year started off with the markets moving to multiyear highs.  As we head into March hopefully this trend will continue.  Soybeans have been the leader to the upside for the agricultural commodities most recently.  Export sales have been good, South American production has raised concerns, as has ethanol demand.  Traders and producers will be focusing on the March 30th Planting Intentions and Quarterly Grain Stocks reports.

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

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