It was a wild week in the grain markets on Friday. It seemed as if there were three trading sessions in one on Friday.
The July corn fell just shy of setting a wider range on Friday than it had for the previous three days. Meanwhile, the December corn contract set its trading range for the week on Friday, exceeding the range set the previous three days by nearly a nickel.
Traders arrived on Friday to a fragile grain market that continued to have a keen eye on the global economic concerns that have dogged the markets over the past month. Throw in a highly disappointing monthly unemployment report and poor weekly export demand numbers and the grain markets spent the first part of the morning collapsing to new weekly lows.
The July corn contract then caught a bid based on the first signs in weeks that perhaps fresh Chinese business may have been transacted. The basis level at the Gulf surged nearly $.10 higher this morning prompting a $.27 rally in July corn from its early session lows and giving hope to battered grain "bulls" that perhaps a bottom had been formed.
July corn had found support just above the 50% retracement level on the weekly charts from the 2008 lows to the highs of last summer. In addition, it was in the process of forming a daily reversal on the charts. That changed at mid-session as more rain was forecasted for next week from the noon maps, prompting a setback to new crop corn values and massacre in the wheat market.
In 14 trading sessions, July wheat has managed to rally $1.30 from its lows and break $1.11 from its recent highs. Meanwhile, July soybeans have collapsed nearly $2.00 from its highs on May 2nd.
No one will doubt that high volatility will be a major factor in the grain markets this year. This holiday shortened week just simply aided in proving that point. Weather and production updates should begin to grab back control of the grain trade over the next several weeks.
As it does, it will likely provide producers with some good chances to market some of this year’s production. My suggestion is to grab some aspirin, take a deep breath and work on a plan to take advantage of the opportunities when they arise, because with these markets you simply don’t know how long they will last.