Up Overnight on Greek Hopes, Led by Wheat/Beans

Published on: 06:59AM Feb 13, 2012


·         More hopes that Greece can avoid a default over the weekend after lawmakers passed as austerity bill to secure a bailout
·         Grains higher overnight led by soybeans, which traded higher volume than corn last night; March soybeans trading down to 12.15 on Friday before rallying to close marginally higher on the day
·         Gap left on the March soybean chart at 12.30 ¾ overnight
·         Corn struggling to keep pace with wheat and soy markets; March contract to 6.38 resistance overnight and is holding its ground for the time being
·         Soybeans gaining sharply on corn in new crop ’12 contract in recent session; Traders now "selling back" corn acreage in order to buy bean acres? (Soy vs. Corn 2x1 on next page)
·         Trade remains concerned over weather issues in S. Brazil and Parana; Cold temps in E. Europe also a concern to wheat traders in particular
·         US$ lower this morning on Euro strength; Riots in Athens and all around Greece continue to start the week
·         USDA 10-year baseline projections to be released today; Outlook Forum is Feb 23-24
·         US HRW and SRW wheat trading at discount to corn in Midwest, which many believe will result in increase in feed wheat demand
·         Australian wheat exports to China may double this year according to Rabobank
·         Reuters article regarding high fertilizer prices and farmers who have not yet secured supplies
We’ll use the 6.38-6.39 area as our upside pivot point today in March corn. A close above this level would likely have some shorts running for the door. Support at 6.28 held last week; A penetration of this level today or tomorrow would likely result in another leg down. Last week’s USDA report was neutral, which in our view is bearish to market action…especially while rallying from recent lows. Our view on the corn market is neutral with a bias to the downside. Last week’s report was not food for the bull by any stretch of the imagination. March soybean to look poised to revisit resistance in the 1245 to 1250 area this week. Some suspect that China has become involved in the beans on the recent break. Producers: Take a look at re-owning cash corn sold pre-report on a break this week. 
As always, call the office with questions or concerns.
Joe Vaclavik
(312) 462-4438