Grains finished mixed with March corn down 12 ¼ cents, beans up 3 ½ cents, and wheat down 11 cents. The corn-bean ratio continues to come back in favor of beans. For the month March corn is now down 9 ½ cents while March beans are up 72 cents!
After coming in from the long weekend and seeing crude oil make new highs above $106 per barrel, you would think corn could draw more support than it did. I don’t want to sound like a broken record, but this could still be a massive unwinding of intra-commodity spreads as we see these huge swings between the products.
We did see USDA sale announcements before the morning session started. There were 250,000 MTs of soybeans contracted to China for 2012-2013 delivery as well as 110,744 MTs of corn contracted to "unknown destinations".
On Thursday the USDA will announce "unofficial" 2012 carryout estimates at their Annual Outlook conference. We have been talking about an expected increase in corn acres for a while now and the market seems to be responding to the same prospect. Beans have made a large comeback to corn as we have obviously seen in the monthly net changes. We think this latest rally in beans is an opportunity to get hedged in that market again. To receive a trial of the EHedger morning/afternoon grain commentaries with hedge recommendations, please sign up using the link below. Have a great week!
"Managed Money Net Futures/Options Positions" Source: Commitment of Traders
Corn: Net Long 206,053 contracts which is a decrease in net longs by 1,661 contracts
Chicago Wheat: Net Short 44,441 contracts which is an increase in net shorts by 13,572 contracts
Soybeans: Net Long 81,042 contracts which is an increase in net longs by 1,292 contracts
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Jim's Afternoon Markets Report--February 21