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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 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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