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Standard Grain

RSS By: Joe Vaclavik

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/Soy Sharply Higher Overnight

Dec 19, 2011

 

·         Grains shooting higher overnight on South American weather threats and short covering; Soybeans trading 50+ cents removed from last week’s lows and flirting with major resistance in the 11.50 area in the March contract
·         S. American forecasts call for some rains later this week; Most believe no real damage has been done to crops thus far
·         Funds cut long in corn by 1k to 50k; Covered 8k of shorts in beans, now short 15k; Increased short in wheat by 4k to 83k
·         China buying corn from domestic farmers in a bid to refill government controlled stockpiles
·         India looking for record wheat crop in 11/2; Favorable weather and higher acreage seen
·         Cattle placements rose on Friday Cattle-on-Feed report after analysts had predicted a decline; Some see this as being bearish cattle and bullish feed grains
·         Asian equities drop hard on death of North Korean leader Kim Jong Il, little effect seen on US markets
·         Export Inspections this morning at 10am CST; Census Crush and Export Sales on Thursday morning; Markets open Friday, closed Monday
 
 
In general, early-season weather rallies are to be sold. We view this as more of a technical bounce as the weather threat in SAM seems minimal at this point. Rains forecasted as early as Friday/Saturday. Producers can use this opportunity to sell some old crop cash grains re-own with call options as long as basis levels remain favorable. Friday’s cattle-on-feed numbers should be an indication from the USDA that feed number could be up in future reports. 
 
 
As always, call the office with questions or concerns.
 
Regards,
Joe Vaclavik
(312) 462-4438
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