Walsh Commercial Hedging 11/1/12
Nov 01, 2012
The grain complex settled on a mixed note after a disappointing close for corn. December was up 7 ½ cents at 763 ¼ in early morning trading and stayed in the green for most of the day but at 11:06 the tides turned and December corn finished the down 5 ¾ at 750. Corn has been supported by continued talk the US corn will be competitive on the world market in a matter of weeks and continued uncertainties with weather in Argentina. Even though the US remains overpriced relative to other world origins the spread between the US and South American corn continues to narrow. However, in my opinion the US is still weeks away from being a competitive player thus keeping corn range bound for the time being unless the weather in South America really takes a turn for the worse. The corn market might be a little bearish tonight after FC Stone came out with their production numbers. They pegged corn at 124 bpa with production at 10.881 billion bushels. The USDA currently has yield at 122 bpa and production at 10.705 billion bushels. For tomorrow’s delayed export sales report the trade is looking for corn sales of 200-400 MT. Wheat found support in early trading from a revision down in Russia wheat production and news of yesterday’s winter wheat crop rating which at 40% gd/ex is the poorest on record and managed to stay in the green during corns sell-off finishing the day up 4 cents at 868 ½. The soy complex was the winner of the day with January beans finishing the day up 11 ½ cents at 1560 ½. Continued firm cash markets and a lack of producer selling are helping support soybeans. FC Stone pegged bean yields at 39.1 bpa and production at 2.959 billion bushels. That is up from their previous estimates of 38.2 and 2.849. Many in the trade feel that the USDA will raise their current bean yield of 37.8 in next week’s report. However, given the Chinese appetite for beans, any revisions higher in production could be offset by export demand leaving our balance sheet thin. Also, if there are any delays in soybean production in South America our balance sheet might become razor thin. For tomorrow’s export sales the trade is looking for beans to come in between 500-700 MT.
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