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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.

Bulls in the Driver’s Seat for Now

Jan 19, 2012

The equity and commodity markets have rallied this week as corporate earnings, unemployment figures, and a weaker dollar have provided positive fuel for the run up.  The Dow is up 203.13 to finish trade Thursday at 12,625.19.  Oil has rallied due to increased demand prospects and is up $1.29 a barrel settling at $100.49 today.  Gold has benefited from a sharply weaker dollar index to end trade at $1,658.20 an ounce, up $19.40 this week.  The agricultural commodities have moved higher as well.

Corn has rallied 6 ½ cents to finish trade on Thursday at $6.06 on the March contract.  The market has stabilized after the limit-down move last Thursday and has traded in a relatively narrow range around the $6.00 level.  The grain has benefited from a sharply weaker dollar and continued heat and dryness in key growing areas of South America.  Export sales should see a rebound in this week’s report due out tomorrow a day late due to the holiday Monday.

Soybeans have been the leader to the upside for the agricultural markets and have gained 38 ¾ cents on the March contract to settle at $11.97 Thursday.  Production uncertainties from South America are bolstering ideas that export demand will shift back to U.S. soybeans in the near future.  Adding to those ideas is the fact that China bought 414,000 MT after the USDA reports.  A weaker dollar and possible Chinese monetary easing have added support.

Wheat has gained support from corn and soybeans leading to gains of 3 ½ cents to close at $6.05 ¾ on the March CBOT contract.  The grain has little support of its own due to ample world supplies, lackluster export demand, and a good start to this year’s winter crop.  These factors will continue to pressure the market going forward.  Export sales are expected to be routine once again in tomorrow’s report.

Strong economic data, a weaker dollar index, and lower unemployment claims have led the equity and commodity markets higher this week.  Dry and hot weather in South America is opening the door for increased demand prospects for U.S. grain.  Early indications are for better than expected export sales in tomorrow’s report which comes a day late due to the Martin Luther King holiday Monday.


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