EHedger Closing Grain Commentary 11/1/11
Nov 01, 2011
Markets finished mixed. Corn had a sharp rally off the lows late in the day to finish 7 ¼ cents higher. January soybeans finished 14 ¾ lower at $12.02 ½, and December wheat finished up 1 ¾ at $6.30.
Early on it looked to be a rather weak trading session with the outside markets sharply lower after the Greek referendum call. Basically we could see an undoing of the agreement that was made last week which was the base reason for sending the outside markets sharply higher. Today the Euro currency finished sharply lower and the US Dollar sharply higher which would typically be a negative factor for grains.
The late day session rally was on heavy volume in corn and we can speculate that it may have been a liquidation move. In the last 15 minutes 25,000 contracts of December corn traded on the screen rallying the contract 14 cents! There was no 1pm grain announcement or outside market move that warranted such a rally and so we think it could have been someone short having to get out, whether it was related to MF Global or not I am not sure.
The rally also put us right back to where we have been for the past 3 weeks and I am beginning to sound like a broken record but we finished just above the 200 day moving average. Beans on the other hand did not rally with corn and the November-December corn/bean spread posted new settlement lows of 1.82 to 1. The market continues to favor corn over soybeans even going out to new crop with the 2012 spread trading at 1.99 to 1.
FC Stone came out with their yield estimates today. They are projecting the national average corn yield to be 148.4 which compares to their previous estimate of 148.7 in October and the USDA October estimate of 148.1. They are projecting the national average soybean yield to be 42.2.4 which compares to their previous estimate of 42.8 in October and the USDA October estimate of 41.5. Until this November 9th report the market could continue to chop around as it has, but given the discount world grains have to undercut our prices, as well as the net long positions the spec longs are still holding, we like making sure the downside risk is well covered. To receive a two week trial of our services please contact an EHedger broker today or sign up using the link below.
Chart: December corn 15 minute chart w/ volume
Chart: December corn daily chart
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