Beans Continue to Gain on Corn Overnight

Published on: 07:46AM Mar 14, 2012


·         Grains mixed overnight; Soybeans up again with wheat and corn down; Corn traded to the high end of recent range on yesterday’s open and failed to penetrate major resistance at 6.66/May
·         Outside markets mixed with currencies, crude and equities mostly flat; Bonds and metals both moving sharply lower
·         Today is last trading day for March grain contracts
·         Argentina dock worker’s strike has been suspended until next week, although issues have not been resolved
·         Several wire stories discussing the potential for China corn imports in 12-13; One noted analysts believes they will total as much as 6-8mmt
·         China corn plantings seen up 2% in 12-13
·          Yesterday’s sale of 240,000mt of US corn to unknown destination rumored to be China purchase
·         President of American Farm Bureau says a revised farm bill this year is unlikely, suggesting that the election year will hamper efforts to get one passed
The failed rally in corn yesterday should be a caution flag for bulls as we approach the planting intentions and quarterly stocks report at the end of the month. More traders are beginning to question the validity of current USDA old crop stock estimates. Many now believe that old crop stocks will shrink drastically, while spring plantings could be massive. Old vs. new crop spreads have already moved a great deal, however many now believe that a move higher in the spreads is imminent. 
Soybeans continue to make highs on China interest and the prospect of low spring acreage. The market continues to be extremely overbought from a technical standpoint, a fact that doesn’t necessarily mean a whole lot in a trending market. 
Call the office for hedge ideas ahead of the March 30th report. 
As always, call the office with questions or concerns.
Joe Vaclavik
(312) 462-4438