It was a true turn-around-Tuesday with corn closing lower while soybeans and wheat closed higher. The market is awaiting Thursday’s reports.
Kansas City wheat held the best support Tuesday closing up 9 ½ cents. Yesterday’s crop ratings were 29% good-excellent for Kansas wheat, 19% in Texas, and 26% in Oklahoma. The "managed money" is net short Chicago wheat but holds a relatively even net position in KC wheat. Still this could be a result of short covering ahead of the report. Either way we don’t expect anything substantial to happen before Thursday.
The CME announced that they are raising the margin requirement on corn futures. The requirement is now $2700 initial/spec and $2000 maintenance/hedge which is up from $2000/$1500 respectively. This change will be effective Wednesday.
The average guess for corn stocks is 5.013, 0.935 for soybeans, and 1.177 for wheat. Corn acres are expected to be 97.252 million while soybean acres are estimated to be 78.40 million. We don’t foresee any major surprises from these levels except maybe some additional soybean acres (0.5-1.0 million). Corn volatility has been steadily creeping higher but far less than I would have expected prior to this report. The short-dated new crop options are a decent way to get hedged without spending too much in time premium. The markets will be closed for Good Friday but night trade will resume at its normal time on Easter Sunday.
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