Joseph Vaclavik is the president at Standard Grain in Chicago. Standard Grain provides futures and options brokerage to farms, feedlots, elevators, processors, end-users and traders. Visit www.standardgrain.com for more information.
Corn Collapses, Beans Hold Together...
Mar 29, 2012
· Grains mixed to lower overnight; Corn prices collapsing this week to lowest levels in months; Dec corn able to hold November low at 5.35 overnight while the nearby contract traded below 6.20 after trading 6.56 on Sunday night
· Soybean prices holding together despite collapse in corn market; Traders eyeing mostly ideal planting weather, which is bearish corn from both a yield and acreage standpoint
· USDA to release Planting Intentions and Quarterly Stocks report tomorrow morning at 7:30am CST; Trade is looking for corn acres near 94.7mil and soybean acres near 75.3mil
· Traders looking for corn stocks near 6.15bil/bu, soybean stocks near 1.387 and wheat stocks near 1.223
· Export Sales this morning at 7:30am CST, estimates:
o Wheat 450k-750k mt
o Corn 600k-900k mt
o Soybeans 450k-750k mt
· Outside markets mostly mixed this morning; Currencies flat, outside commodities slightly lower in most major contracts
· Sources reported that China purchased 360,000mt of US corn yesterday; Traders looking for confirmation this morning at 8am CST; Reuters noting that China is paying less for corn imported from the US than it would for domestic supplies
Today is the last day for producers of corn, soybeans and wheat to shore up their marketing ahead of tomorrow’s USDA report. December corn has dropped more than 20 cents on the week, and could certainly slide lower on bearish news tomorrow. The most downside risk likely sits with the soybeans, a market that has rallied nearly $3 since December with very little correction.
Pre-report hedge ideas for new crop corn and soybeans:
Corn: Buy the December 540 PUT / Sell the December 440 PUT ---Pay 40 cents or better
Soybeans: Buy the Nov 1300 PUT / Sell the Nov 1500 CALL / Sell the Nov 1100 PUT ---Pay 30 cents or better
As always, call the office with questions or concerns.