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Grain Hedge

RSS By: Brock Schimbeno,

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.

Will European Summit Provide Direction for Grains?

Dec 08, 2011

The leaders of the European Union are meeting today and Friday to decide on which direction to take on the sovereign debt issues.  The Dow is holding steady and is expecting positive news from abroad.  The index is down 21.72 to 11,997.70 as of the close Thursday.  Oil fell sharply today and is down $3.10 overall this week to settle at $97.90 a barrel.  Gold is off $37.80 an ounce to finish Thursday at $1,707.90.  The dollar index is up slightly adding resistance to the grain markets.

Corn was one of the bright spots in the commodity markets.  The grain is up 5 cents on the week to end trade at $6.00 ¼ on the March contract today.  This area will provide resistance for the time being and nearby support is in the $5.85 area.  One of these levels will most likely be tested tomorrow as the USDA will release its latest recent Supply/Demand report.  Export sales rebounded and were reported as 695,500 MT, which is up 148% from last week.

Soybeans remain technically and fundamentally weak and are down 4 ¾ cents on the week to finish trade at $11.31 on the January contract.  The $11.20 area has provided good support of late, but estimates are for the USDA to raise its ending stock projections in its monthly report tomorrow.  If this comes to light, this support area could breakdown.  Export sales were above expectations at 770,400 MT, which is up 57% from the previous week.

Wheat has been the leader to the downside and is off 28 ½ cents this week to end trade Thursday at $5.97 on the March CBOT contract.  Wheat is now resting in the $6.00 long-term support area and the fundamentals continue to pressure the market lower.  The USDA reports will mostly be neutral on Friday as most of the estimates will remain unchanged.  Export sales remain routine in nature and were reported as 427,200 MT, which is down 15% from last week.

The equity and commodity markets are eagerly awaiting news out of the European Union summit tomorrow.  Adding to the anticipation are the pending USDA Supply/Demand reports to be released at 7:30 AM CT.  The lone bright spot for commodities is corn in what has been an otherwise mundane week.  Currently, the grain markets are resting in some key support areas to watch moving forward.


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