Monday, May 21, 2012
market comments first day trading 21 hours
Below are market comments.
First off today was the first day of trading from 5:00 at night to 2:00 the next afternoon. So we won’t be see early calls any more we will be seeing early trade action reports. The other big thing is how the markets close and settle. The pit’s still close at 1:15 and the settle prices are still based on trading price at or around 1:15; even though the markets trade until 2:00. Today’s price action shows how that will effect us.
Our bids that we sent out earlier are based on the settlement prices at 1:15; but if you call us up to sell grain this afternoon our prices won’t be what is on the bid sheet; at least not until 5:00 p.m. at which time the markets re-open. Our bids when the markets closed will take into effect the last trades at 2:00; many other elevators and maybe someday in the near future grain pricing or the marketing of grain will probably only be allowed during market hours.
Bottom line is that the CLOSE on grain future prices are now DIFFERENT then the LAST price. Here are the examples today. KC July wheat “settled” or “closed” or closed at 7.15; but the last trade at 2:00 was 7.09 ¼ . So if you call us up this afternoon our bid is different then what our closing bid is at because we are following the last trade.
Someone asked me if that is a direction of what’s going to happen tonight? Probably but there has always been breaks for the grain prices and usually they open about where they last traded at; but not always.
If you have questions on the new market hours please feel free to give us a call. Keep in mind that volume and bid ask spreads typically get wider once the pit closes and I would say that happened today also. So prices between 1:15 and 2:00 might be thin at time; perhaps like MPLS most of the time?
As for the markets today we had a mixed bag; started rather firm last night but cooled off as the session went on.
The last trades for the grains where down 6 on July corn, Dec corn last trade was up 2 cents, MPLS wheat had a last trade of up 4 cents, KC wheat had a last trade of up 4 cents, CBOT last trade of 4 higher, equities where firmer with the DOW up 1.35 points, the Dollar was softer by 300 with the cash index at 80.963, and crude up a little over a dollar.
Now keep in mind the above and realize that you might have heard comments like KC wheat closed up 10 cents which it did.
Bottom line wonderful or not so wonderful changes. At the end of the day this won’t be all bad; it just seems a little challenging as we stand right this second.
Please give us a call if there is anything we can do for you.
Labels: Extended Trading Hours on Grains and What it means for Producers Hedging Crops Like Wheat Corn and Beans