Located at the Chicago Board of Trade, Advantage Grain is a specialized division of MF Global focusing exclusively on the grain and livestock markets. Read their latest market commentary.
Apr 06, 2011
· Grains mixed overnight with soybeans showing some strength after a few days of weakness following last week’s planting intentions report; Large South American soy crop pressuring both flat price and old/new spreads as of late
· Corn trading 6-7 lower overnight before bouncing back to close the night session near unchanged; Traders now bracing for Friday’s Crop Production report; Some projecting stocks/usage for corn as low as 4%
· Crude Oil trading near recent highs overnight; Spot-month May trading solidly above $108/barrel
· Pre-Report Trade Guesses (Ending Stocks):
o Corn 586 avg (515-650) 675/March
o Soybeans 137 avg (120-157) 140/March
o Wheat 857 avg (835-893) 843/March
Corn prices continue to remain firm, not yet posting a lower close since last week’s stocks numbers. Some traders are looking for an objective on July corn somewhere in the 8-8.50 area. Most expect old/new spreads to continue to move higher on further move in flat price. The trade is not quite sure what type of inverse is required in order to ration demand sufficiently.
Soybean price action has certainly been disappointing for the bulls. Beans trading around pre-report levels despite what most would call friendly numbers from the USDA last week. Market action is likely indicative of a larger-than-expected South American crop coinciding with a temporary decrease in Chinese demand. Some cash sources still worried about originating sales for this coming summer. Old/new spreads now $1+ removed from January highs.
Wheat prices should continue to follow corn on rallies; Many looking for wheat/corn to trade negative. Producers may want to use high back-month prices to sell some cash production.
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· Producers should look to price both new crop soybeans and corn on a spike higher ahead of Friday’s report; New crop corn especially looking somewhat ‘toppy’ as producers price $6/cash corn across the country
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