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December 2011 Archive for 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.

645 Holding For Now...

Dec 30, 2011

645 is proving to be an battle ground for the March Corn contract in this morning's trade. We have traded at 645 but as you can see from the screen capture below we are seeing serious selling pressure here. The "size" column denotes the number of orders sitting at a given price and below you can see we have 712 sell orders waiting to be filled at 645. If we are able to trade above here today expect heavy resistance at 650. Want to view market depth in your home for $7 per side commissions? Take a demo of Firetip today!

FTbutton

AT12 29

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Corn Positive for 7th Session in a Row, Hits Six-Week High

Dec 27, 2011

The grain complex finished sharply higher, fueled once again by the persistent heat in Brazil and Argentina and bleak precipitation outlook there for the coming week. At the closing bell Corn finished up 14 cents, Wheat up 21 3/4 cents and Soybeans up 34 cents.

 

Today’s strong push higher helped turn some technical indicators more bullish in the short term, but market participants should remain cautious since these levels were achieved on weak holiday volume. Corn, Soybeans and Wheat were all able to break through their 50 day moving average resistance, which triggered more intense short covering during today’s session. Corn should start to see some resistance around $6.40 as we approach the bottom side of the range we traded in much of October and November.


The dollar has not played a significant role in determining grain prices for three days now, but it will most likely become a bigger factor later this week. The dollar index should continue to trade sideways with support at 80 until we see fresh news out of Europe. Our eyes will be focusing the Italian Bond sale scheduled for Thursday as it will be the first real test of demand since the dramatic ECB liquidity operation. Be sure to check our blog on Thursday to see the results.

 

 

GrainHedgelogo                                                                  FTbutton                           

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Grains Rally On Light Volume

Dec 22, 2011

The grain markets have soared this week aided by drier South American weather,
a weaker dollar index, and positive economic news. The Dow Jones index has rallied
308.63 points to end the session Thursday at 12,169.65. Oil has raised $5.43 a barrel by
the end of trade today to settle at $99.83. Gold has found support after a sharp sell off
last week closing today at $1,605.60, which is up $9.60 an ounce. A modestly weaker
dollar index has added strength to a commodity rally this week.


Corn settled at one-month highs today after rallying for the fifth consecutive day.
The March contract has tacked on 34 ½ cents to finish at $6.17 ½ today. A drier, hotter
forecast for Argentina and Brazil came out mid-week and pushed the market higher
hitting pre-placed buy stops along the way. Assisting in the rally was a weaker dollar
index and better than expected export sales. Export sales were reported as 715,000 MT,
which is up 42% from last week.


Soybeans have enjoyed a six-day rally while managing to gain 32 ¼ cents this
week to close at $11.62 ¼ on the January contract Thursday. The drier weather in South
America is helping the rally as is a weaker dollar index. The market is currently butting
up against a couple of key technical resistance levels in the $11.60-11.70 range. Export
sales again beat expectations at 653,400 MT, which is up 39% from last week.


Wheat had the biggest rally of the week and is up 39 cents on the March CBOT
contract after the session Thursday. The grain benefited mostly from a weaker dollar
index and an improved global economic outlook. Fundamentally, there is still a large
world supply, especially feed quality wheat, which will cap further advancements.
Export sales continue to be mostly routine business and were reported as 362,300 MT,
which is up 14% from last week.


Santa Claus appears to have visited a little early from a producer’s standpoint
with double-digit rallies in the grains complex this week. South American weather is
adding a premium into the market, the dollar index is weaker, and a better global
economic situation is shaping up. All in all, the last few days of the year has offered up
some pretty good prices before attention turns to the January USDA reports.

Brock Schimbeno - Grain Hedge

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Are the Bears Stealing Christmas?

Dec 15, 2011

Early in the month, the markets appeared poised for a "Santa Claus" rally, but now it appears that the bears are stealing Christmas.  The Dow has fallen 315.45 points to end trade Thursday at 11,868.81.  Oil received a supply shock, stemming from an OPEC meeting, which sent the commodity down $6.18 a barrel to end trade today at $93.46.  Gold has been blistered by losses of $137.40 an ounce to settle at $1,573.40 Thursday.  The dollar index has rallied sharply higher as the Euro currency has tanked.  Agricultural commodities have been mixed so far this week.

Corn has touched 9-month lows this week and has lost 15 ¼ cents on the March contract to settle at $5.79 today.  Technically, the grain is in very rough shape after testing support in the $5.80 area.  Fundamentally, there is little supportive news and traders are anticipating the January 12th Supply/Demand and Crop Production to give the market direction.  Speaking of fundamentals, export sales were reported as 504,700 MT, which is down 27% from last week.

Soybeans have been the lone bright light in a string of dead bulbs.  The oil seed is up 4 ¼ cents this week to finish trade at $11.11 ¼ on the January contract.  Technical support has held for this market in the $11.00 area.  The sharply stronger dollar index has put a cap on any rallies however.  Demand outlooks are uncertain and ending stocks are ample.  A supportive factor comes from weather concerns in South America.  Export sales were reported as 468,600 MT, which is down 39% from last week.

Wheat has lost 16 ¾ cents on the CBOT March contract to settle at $5.79 ¾.  Fundamentally, this market is very weak.  The world stocks are near all-time highs and export competition has been stiff.  Adding to the downward pressure is the sharply stronger dollar index.  There is still a very nice premium for high-protein wheat based on the Minneapolis and Kansas City grain exchange contracts.  Export sales remain routine and were reported as 318,400 MT, which is down 25% from last week.

As we head towards the New Year it seems less likely that a "Santa Claus" rally will happen and more likely that the bears will steal Christmas.  Supportive news has been few and far between for the markets of late.  Technically, we are sitting near some key support levels which will be important to keep an eye on.  Light volume and choppy trade should be expected heading into the New Year.

GrainHedgelogo                                                                  FTbutton                           

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Soybeans Open Lower, But Bulls Show Resolve Late

Dec 14, 2011

Soybean futures saw wild price action today in Chicago, opening sharply lower before rallying into the close. In the last five minutes of the trade, we saw buyers enter the market even as the dollar index was showing strength and crude oil was absolutely tanking -- down $5.40 a barrel.

Some key support levels were tested today, with JAN soybeans trading below $11.00 early in the day, rallying back, and then retesting $11.00 again late in the session. Below is a 5-minute chart taken from the Firetip platform detailing today's move. You can see we were trending lower late in the session before printing a strong close. The bulls certainly showed resolve late in the day, but we look for the $11.00 level to be broken as we move forward.beans11 14

GrainHedgelogo                                                                  FTbutton                           

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Grains Open Higher This Morning

Dec 13, 2011

Grains continued gains from the overnight session into the morning, at the time of this post we see corn up 7, soybeans up 7 1/2, and wheat up 12 1/2. The Dollar Index is once again trading higher this morning, and once again the bulls will be glad to see the grains trading higher in the face of this strong dollar. We are still looking for the grains to trade lower through the New Year, and this rally may be a good time for producers to hedge on the board or make some cash sales.

TM12 13

GrainHedgelogo                                                                  FTbutton                           

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Grains Make Small Gains Even As Dollar Index Rallys

Dec 12, 2011

We saw grains trade mixed today with corn and soybeans making up ground late in the day. The screen capture below is taken from the Firetip platform and you can see that the Dollar Index is once again testing recent highs. This should provide some overhead resistance, but the deteriorating situation in Europe will certainly outweigh any technical resistance if this situations continues without resolution. Today's trade lacked conviction either way, but I'm sure the bulls are happy to see grains make small gains even as the Dollar Index picked up steam.

As you can see from the banner above, we have a special running through December for new Grain Hedge clients. Open an account by December 31st and receive 10 free trades during the month of January. For complete details click the link above or contact a Grain Hedge broker 877-472-4607

Dollar Index

Will European Summit Provide Direction for Grains?

Dec 08, 2011

The leaders of the European Union are meeting today and Friday to decide on which direction to take on the sovereign debt issues.  The Dow is holding steady and is expecting positive news from abroad.  The index is down 21.72 to 11,997.70 as of the close Thursday.  Oil fell sharply today and is down $3.10 overall this week to settle at $97.90 a barrel.  Gold is off $37.80 an ounce to finish Thursday at $1,707.90.  The dollar index is up slightly adding resistance to the grain markets.

Corn was one of the bright spots in the commodity markets.  The grain is up 5 cents on the week to end trade at $6.00 ¼ on the March contract today.  This area will provide resistance for the time being and nearby support is in the $5.85 area.  One of these levels will most likely be tested tomorrow as the USDA will release its latest recent Supply/Demand report.  Export sales rebounded and were reported as 695,500 MT, which is up 148% from last week.

Soybeans remain technically and fundamentally weak and are down 4 ¾ cents on the week to finish trade at $11.31 on the January contract.  The $11.20 area has provided good support of late, but estimates are for the USDA to raise its ending stock projections in its monthly report tomorrow.  If this comes to light, this support area could breakdown.  Export sales were above expectations at 770,400 MT, which is up 57% from the previous week.

Wheat has been the leader to the downside and is off 28 ½ cents this week to end trade Thursday at $5.97 on the March CBOT contract.  Wheat is now resting in the $6.00 long-term support area and the fundamentals continue to pressure the market lower.  The USDA reports will mostly be neutral on Friday as most of the estimates will remain unchanged.  Export sales remain routine in nature and were reported as 427,200 MT, which is down 15% from last week.

The equity and commodity markets are eagerly awaiting news out of the European Union summit tomorrow.  Adding to the anticipation are the pending USDA Supply/Demand reports to be released at 7:30 AM CT.  The lone bright spot for commodities is corn in what has been an otherwise mundane week.  Currently, the grain markets are resting in some key support areas to watch moving forward.

 

GrainHedgelogo                                                                  FTbutton

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

December, Is It Time for a Santa Claus Rally?

Dec 01, 2011

With retailers reporting strong sales early in the holiday shopping season and global economic concerns subsiding for the time being, the equity and commodity markets have rallied to start December.  The Dow has increased 788.09 points so far this week to finish trade Thursday at 12,020.03.  Oil has followed gaining $2.92 a barrel to settle at $100.24 today.  Gold and the dollar index, which is off sharply, continued their inverse relationship with the metal gaining $57.60 an ounce to end Thursday at $1,743.10.  The commodity markets have enjoyed what could be the start of a "Santa Claus" rally.

Corn has added 11 ½ cents to the March contract settling at $6.01 ½.  After the large sell off in November it was to be expected that prices would rebound.  Profit-taking and position evening ahead of the December contract’s first notice day and before the end of the year aided the rally.  Lending support technically was the $6.00 level and the 100% Fibonacci retracement line.  Export sales missed expectations at 280,600 MT, which is down 11% from last week.

Soybeans have rallied off of 13-month lows this week gaining 21 ½ cents on the January contract that sits at $11.28.  Any rally will be short-lived, however, due to a great start for the South American crop and questions surrounding Chinese demand.  The technical landscape for soybeans remains very weak and the market is now sitting on long-term support in the $11.25 area.  A move with conviction through this area could lead to another sharp sell off.  Export sales were in the middle of expectations at 489,600 MT, which is down 47% from last week.

Wheat has been the leader to the upside this week rallying 25 ¼ cents to end trade today at $6.14 ¼ on the March CBOT contract.  The biggest supporting factor has been the sharply weaker dollar index.  The grain has taken back its premium over corn as well.  This will give support going forward as livestock producers will begin to feed more of the now cheaper corn crop.  Export sales were reported at 503,000 MT, which is down 18% from last week.

Solid economic data domestically and subsiding Euro-zone debt fears have propelled the equity and commodity markets higher this week.  The foundation is laid for a "Santa Claus" rally as we head towards the New Year.  Export sales and the dollar index will be a driving force as we are now in a demand driven market.  Next week brings us the USDA Supply/Demand reports and the Crop Production update.

 

GrainHedgelogo                                                                  FTbutton

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

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