Tuesday, December 6, 2011
grain market comments dec 6th
Markets where called weaker this a.m. behind a weak overnight markets that saw corn break major support.
In the overnight session corn was down 9 cents, beans were off 4 cents, KC wheat was 6 cents lower, MPLS wheat was off 6, and CBOT wheat was 7 lower. At 9:20 outside markets have the equities slightly positive with the DOW up 35 points while crude and the US dollar are about unchanged.
The markets then opened up a little weaker then where the overnight session left off; but as the day moved on we slowly gained ground and found our markets positive when all was said and done. We left a bullish key reversal on the corn charts (a key reversal would be making a new high or low for a move and then reversing and closing the opposite) in today’s price action we saw the March corn contract get to its lowest level since last March and then we managed to reverse the day closing up 5-6 cents or about 17 cents off of its lows.
Besides corn closing up 5-6 we seen new crop 2012 corn up 2, beans up 3, KC wheat up 3-4, MPLS wheat up 1, and CBOT wheat up 1-2 cents. Outside markets have the dollar near unchanged with the cash index at 78.519, crude also was near unchanged presently Jan is trading about 101 a barrel, and the equities closed firmer with the DOW up 52 points.
Overall a decent day for the grains; nice to see the markets turnaround from the lows put in early in the session. Perhaps some of the bad news that we have seen recently is finally build into the prices? (China corn crop bigger, South American crops bigger, Australian wheat crop bigger, blenders tax credit ending, massive world supplies that seem to get bigger daily, etc)
I guess only time will tell if some of the recent bearishness that has surrounded our markets has lost it bang so to speak and selling has become exhausted.
Later this week we will have a USDA report; ideas are for the corn carryout to show little changes, beans to see a small increase in carryout, and wheat to see little changes. Overall estimates are 845 million bushels for the corn carryout versus 843 million last month, beans 211 versus 195, and wheat 830 versus 828.
Overall bias is for a slightly weaker USDA S & D report due to weak demand. Perhaps at some point the recent price break helps out that demand but as of now we really are not seeing super great export demand; perhaps due to the big crops from our competitors. The risk is that see our competitors continue to act like Wal-Mart so to speak in that no matter how cheap we try to sell grain for they are sitting there with so much supply that they will sell it lower. Eventually that should end and perhaps with the Ukraine wheat crop getting projected lower it is sooner than later.
Basis is a little defensive as many producers have done a good job locking some of it in and we simply lack export to domestic competition for most all of our grains.
Quality concerns have been talked about with the Australian wheat crop; but all that really does is create even more competition for our corn via more feed wheat.
Don’t forget that tomorrow we will have another MWC Marketing Hour Round Table where we will go over some charts and do some mock trading.
Also we are still offering free delayed price for both winter wheat and spring wheat.
Labels: Beans, charts, Charts and Strategies, commodity price risk management tools strategies grains futures options money cash flow, crop conditions, Delta Neautral Trading, Leverage Optoins Futures, Marketing Tools, MWC Marketing Hour Round Table, opening grain comments, option selling, Price Management, USDA Crop Report Supply and Demand