Tuesday, April 12, 2011

Grains Meltdown Closing Grain Comments 4-12-11


Markets closed down hard today across the board in a sharp sell off that hit nearly all investments today.

Corn was down 21-24 cents, KC wheat was off 25, MPLS wheat was down 24, CBOT wheat was down 40, crude was off 4.00 or so a barrel, equity markets got beat up with the DOW down 120 points, and the US dollar is weaker with the June down 212 at 75.07.

Bottom line a horrible day for the grains during a day that didn’t exactly have tons of news directly related to the grains leading the headlines.  It was more simply money off the table for all investments then anything.

Technically our wheat charts have turned ugly in a hurry; making the recent spike now more then ever look like just a correction before moving lower.

Even birdseed buyers failed to show any presence today as they simply ran for the doors with the pressure on the markets.

Yesterday Goldman Stach’s issues some sell recommendations for various commodities and today we sure seen some of that pressure as buyers couldn’t get out fast enough.  One good thing was I felt some basis appreciation as some winter wheat buyers where fishing around for a little coverage and this was extended coverage i.e. not simply a logistical need as I had a couple various buyers looking for 11.-12 pro HRW for April – July.  At least that is one positive to come away with today.

Profit taking was the other main headline today.   The question at the end of the day is was today’s move simply a correction before moving higher as our fundamentals may indicate or is the top in?  DTN reported today that their condition index for wheat is as low as they can remember it being.  So perhaps today’s market is simply reminding us that we have plenty of volatile sessions in store for us.





Below is a chart from 1986 showing price action what happened to our markets with Chernobyl









Bottom line make sure you have a solid risk management plan in place in these very volatile markets as we have many things pulling our markets both directions.


Please give us a call if there is anything we can do for you.

Also Neutral Nick has got a little long all the sudden..........suprise not updating daily with the markets moving......hopefully a busy spring doesn't hurt him too much.



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