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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.

 

Up Overnight on Report Expectations

Jan 09, 2012

 

·         Grains rebounding last night after last week’s break; Significant rain event is expected for the driest parts of S. America this week; USDA report on Thursday
·         Forecasters calling for heavy rains in the driest areas of S. America, hot temps to persist for most of the week; Amounts near .75"-1.50" with heavier amounts locally;  At least 1 week of dry weather will follow this week’s rain event
·         USDA to release Crop Production report on Thursday morning; Informa pegged corn production at 12.340bil/bu using a 147.0bpa yield (USDA 146.7/12.310); Informa pegging soybean production at 3.08bil/bu using a 41.8bpa yield ( USDA 41.3/3.046)
·         COT Report issued on Friday; Managed money increased corn long by 44k to 192k, increased soybean long 9k to 33k; Managed now long 10k wheat, reversing positions
·         USDA Ag Secretary spoke at annual American Farm Bureau meeting; Said congress could cut farm subsidies more than expected
·         Argentina soybeans 89% planted, up from 87% last week
 
Grains caught a bid overnight on expectations for a friendly report on Thursday. Although heavy rains are expected for the driest portions of Brazil and Argentina, forecasters do not believe any follow-through rains will be seen. Producers should look to make sales into a rally this week ahead of Thursday’s report. 
Long term, we have major concerns about the ’12 corn market. A combination of 94-95 million acres of corn and ‘normal’ weather could result in a massive crop. The market implications of such a crop would be enormous for producers. It is very important that producers use any significant rally between now and the planting intentions report to hedge new crop production.
 
As always, call the office with questions or concerns.
 
Regards,
Joe Vaclavik

(312) 462-4438    

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