Outside Pressure & USDA Pre-Report Trading

Published on: 11:14AM May 08, 2012

Tuesday's ag futures have been all over the board.  May corn is up 17c, July Corn is up 8c, Sep Corn is up 4.5c, December Corn is up 1c.  Soybeans are down 8-14c.  Wheat is up 4-6c.  The meat complex is under a little pressure this morning, mostly based on outside negative factors.


Corn futures have been higher all day despite extremely negative outside pressures.  The focus has been "old crop/new crop" spreads as old crop inventories are heading toward a 16 year low while Chinese imports are estimated to increase roughly 60%.  Analyst are estimating ending stocks to be  1.714 billion bushels for the new crop vs. 749 million bushel last year. 


Soybeans have been the most volatile grain this morning and have been as much as 20c lower.  The market is caught in a position of having bullish fundamentals but also having record long managed futures positions.  If they begin to sell their long positions the market could move a lot lower.  This mornings sell off was mainly technical selling based on the market moving below the 20 day Moving average in SN2 and then hitting significant sell stops.  July Soybeans are currently hovering around their support level at $14.50/bu. 


Wheat futures have been higher most of the morning based on dry weather in Eastern Europe.  There is also some talk of our domestic harvest being slightly less than estimated.  There is wheat being cut in Southern Oklahoma, and yields have been above average up to this point.  Test weights have also been fairly strong just above 60lbs.  Fundamentals suggest wheat is the most negative of all of the grains.


Happy Trading,


Justin Lewis, M.B.A.

Toll Free: (877) 431-9805


There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.