Traders Look for Bearish Tone from USDA Outlook Meeting

Published on: 06:58AM Feb 22, 2012


·         Grains lower overnight led by soybeans, which were the only market able to finish higher during yesterday’s whipsaw trading session
·         Weather issues in South American now on the backburner, as most sources agree that crop conditions there have "stabilized" after recent rains
·         Japan has recently stepped up US feed corn purchases according to sources, some believe as much as 1.8mmt has been sold for April-June period; Delays in shipments from Ukraine are to blame for increase in demand for US grain
·         Looming corn acreage number pressuring grains early this week; Spread action in corn is notable, old crop contracts vs. December fell drastically yesterday
·         Outsides slightly negative this morning, US$ higher with crude and equities marginally lower
·         Many believe USDA’s outlook meeting will focus on increase in spring plantings and growing ending stocks in 2012
·         First Notice Day for March grain futures is next Wednesday; March options expire at the close on Friday
Corn and wheat remain range bound as soybeans continue their recent uptrend. Beans are clearly trying to "buy back" some acreage at the last minute; recent export sales also helping the bull cause in beans. Most technicians looking at the corn market as a neutral affair. New crop soybeans are drastically overbought as far as charts are concerned, however we wouldn’t want to be short head into a potentially explosive acreage report in March. Support in May corn at 6.28 and 6.26. Producers, feel free to call the office to learn more about hedge strategies for new crop corn and soybeans.    
As always, call the office with questions or concerns.
Joe Vaclavik
(312) 462-4438