EHedger Afternoon Grain Report
May 05, 2010
Corn and wheat closed higher and soybeans closed lower. All three markets opened sharply lower in response to the sharply lower Euro and sharply higher dollar. The situation in Greece is getting out of control and this caused the Euro to make new 13-month lows versus the U.S. Dollar. Energy and equities were also sharply lower. Rumors of an additional 10 cargoes of corn sold to China helped corn rally and close higher on the day. There is also some weather premium being put into the corn and wheat ahead of the frost/freeze that is expected to hit the Plains and Midwest over the weekend. Currently temps do not look threatening enough to cause any serious damage, but the funds are short corn and wheat and long soybeans and this is causing some unwinding of this trade. Meal was weak today and this weighed on the soybean market. China announced that they may not accept soybean imports from Argentina (as they have already announced for soybean oil from Argentina). Argentina and China are in a trade war, and this announcement seems to be more political than anything else. Informa will come out with their newest acreage estimates on Friday… most people expecting a little more corn and a little less soybean. Weekly exports sales are out tomorrow morning and estimates are high for both corn and soybeans. China has been an aggressive buyer of beans for next fall and corn exports have been high. Soybeans still look overpriced and corn still looks to be in a trading range and towards the upper part of the range. The wheat market continues to rally on short-covering.
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