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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 Strong Overnight, Soy/Wheat Mixed...

Jan 27, 2012

 

·         Grains mixed overnight with corn showing strength after yesterday’s sell-off; Technicians still describing corn as a being in a “neutral” phase, however recent spread action makes us lean slightly bullish
·         Grain exports were solid yesterday; Combined old and new crop corn exports over 1mmt, above analyst expectations
·         Outside markets mostly positive, Euro higher along with crude and equities
·         USDA to release new long term ag projections report, which will cover the next 10 years; Projections cover crop and livestock commodities, ag trade and aggregate indicators, such as farm income and food prices through 2021
 
Slow news day today headed into the weekend with nothing too exciting happening in the outside markets. We maintain an upside bias in the grain market, especially in old crop corn. Next big resistance in the march contract is in the $6.60 area; we wouldn’t be surprised to see a trade near there next week barring any major change. Corn spreads barely correcting yesterday, however N-Z still holding near the 80+ mark. Clearly, there is some short covering going on in wheat, where the H-Z spread has rallied almost 30 cents in the past couple of weeks. We wouldn’t be surprised to see corn, wheat and soybeans take out yesterday’s highs at some point today. Yesterday’s “open higher and sell-off” action was simply punishment for bears who blew out of short positions on the higher open. If anything, pushing some shorts out on the open, and weak long out on the close, was a healthy action. 
 
Have a great weekend!     
 
As always, call the office with questions or concerns.
 
Regards,
Joe Vaclavik
(312) 462-4438   
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