The grains had a sharp selloff today as wheat led the way lower. July wheat dropped 28 ½ cents today to close at $6.14 ½. Strong yield potential is expected after reports were flowing in today of favorable yield tests on the KC wheat tour. Corn followed wheat down closing 17 ½ cents lower at $6.11 ½. July soybeans started out strong reaching the $15.12 ½ for a high but came all the way down to settle at $14.85. This settlement in July happens to be a technical key reversal, which could spur more downside momentum for soybeans (see chart).
Chart: July Soybeans
Tomorrow morning we will have the export sales out at 7:30 am. The ranges of analyst estimates are as follows:
Corn 3,000,000 – 4,000,000 MTs
Soybeans 1,000,000 – 1,500,000 MTs
Wheat 600,000 – 850,000 MTs
Soymeal 200,000 – 400,000 MTs
Soyoil 5,000 – 15,000 MTs
We will have the actual results in the morning letter.
December corn is about 8 cents away from making new lows for 2012 (see chart). As long as weather continues to look favorable across the Midwest we could see this downward trend continue. Making sure you have enough downside coverage is always important but with such a strong start to the growing year it never hurts to double check your position in AMMO.
Chart: December Corn
Last I wanted to mention the upcoming changes to the grain trading hours. The CME announced that they would be expanding the trading timeframe for CBOT grains to allow 22 hours per day (6pm to 4pm). This will take effect on May 14th and will have a drastic impact on trading as it will basically be a 24 hour market. The time when this change will be most noticed is on report days when grains are still trading at 7:30 am when the USDA typically releases its major crop reports. For now we like staying with the current EHedger recommendations. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!
Chart: November Soybeans
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. The market information contained in this message has been obtained from sources believed to be reliable, but is not guaranteed as to its accuracy or completeness. Market information may not be consistent with current or future market positions of EHedger LLC, its affiliates, officers, directors, employees or agents.
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