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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.

Grains Drift Lower into Tomorrow's USDA Report

Dec 10, 2012


The grains are lower across the board this morning, with corn down 6 3/4, soybeans down 11 1/4, and Chicago wheat off 12 cents. South Korea excluded the US from a corn tender this weekend, indicating that US prices still need to move lower to remain competitive on the export front. Right now ethanol crush margins are sitting about $1.00 per bushels, well below the $2.30 we saw them last year at this time. On average, the trade is expecting a 16 million bushel increase to corn ending stocks, but we are not going to be surprised if the USDA releases a bearish surprise tomorrow for the corn market. Considering the pace of export sales and ethanol production we are looking for a 50 million bushel addition to corn ending stocks in tomorrow's report. Technically, 720 is going to be a important area of support for the March corn contract, but technicals will certainly be trumped by any fundamental surprises out of tomorrow's numbers.

March '13 Corn Chart -- Support at 720


Soybeans look to be a different story, with trade estimates looking for a 10 million bushel reduction to soybean ending stocks. Exceptionally strong US export sales have us well ahead of pace to meet the USDA projections. In their November report the USDA projected 1.345 billion bushels of soybeans exported during the current marketing year, and we have already booked 78% of this total. If you want live quotes for tomorrow's report at your home or office take a no-obligation demo of Grain Hedge's trading platform today!

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