Short Covering Helps Grains Rebound

Published on: 16:31PM Feb 05, 2009
Mar 09 Corn
371 ¼
May 09 Corn
381 ½
+12 ¾
Mar 09 Beans
+30 ½
May 09 Beans
983 ¼
+29 ½
Mar 09 Wheat
561 ¾
+19 ½
May 09 Wheat
574 ¾
+19 ½
Mar KC Wheat
Mar Min Wheat
654 ½
+17 ½
Mar 09 Meal
Mar 09 Bean Oil

The Bottom Line:
1) This morning’s export sales were above expectations for corn, within the estimates for wheat, and a bit disappointing for beans.
2) Commodities in general found support during the session.
3) Argentina received some additional rains overnight.            
Corn, wheat, and beans all saw strong buying during the session. Overall, there was no major news to spark today’s rally. The strong corn sales may have added to the buying interest. However, beans and wheat lead the way and there was nothing impressive about their sales. Overall, it looked like people continue to want to buy the market and they are looking for any reason to do so. There were even stories out there that you need to buy corn because temps are going to get above 40 and the corn on the ground may rot (obviously not a legitimate reason to buy corn). Sure you can get your rallies, especially after big breaks like we just had. However, at this point there just does not appear to be a fundamental reason to start an up-trend from these levels. In addition, yes the producer does still have significant downside risk even after the recent break. The market is going to give rallies like we saw today and producers should make sure to use these rallies to catch up on their sales.
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