Corn Looking for Follow-Through Buying...
Dec 07, 2011
· Grains mixed overnight; March corn traded through the October lows yesterday, only to rally back and finish higher on the day
· Rising world production estimates from China, Australia and South America continue to be bearish factors, while most point to domestic demand for corn from the ethanol and livestock industries as being positive
· Russian grain exports this year expected at a record 25mmt or more, according to government sources
· USDA to release Crop Production report on Friday at 7:30am CST; Carryout Estimates: Corn 831 avg guess vs 843/Nov, Soybeans 214 avg guess vs 195/Nov, Wheat 830 avg guess vs 828/Nov
· Much of the trade has begun to look at the ’12 acreage situation; Many sighting the need for 93-95 million corn acreage; Some believe seed shortage will limit corn acreage expansion in favor of more soybean or wheat planting
· Outside markets very quiet this morning
Follow-through buying in the corn market today would be a very good sign. Charts remains bearish, but may begin to turn for the better on a continued rally. Option volatility rose sharply yesterday in the Jan options, especially. We may recommend a short options play ahead of Friday’s report if this trend continues. Long term, we believe that Nov 12 soybeans will gain on Dec 12 corn, as most producers lean towards corn planting given current price ratios.
Straits Financial provides futures/options brokerage to farms, feedlots, elevators and processors. Call Joe Vaclavik today at (312) 462-4438.