Brandon's Blog 02/06/13 4:10:36 PM|
Grain markets have enjoyed some upward movement through the last two weeks. They are starting to feel a little tipsy with corn trading near the high end of what has been it trading range the last 9 months. Beans are also pushing againest 3 month highs. Wheat has been continued weak even with corn and beans strengthening.
Supply and Demand report and Crop Production report coming out on February 8th. Most trade estimates are leaning to a bearish report, but the trade has been wrong before so who knows.
Let us know if your price has been realized and you want to let some go. We have Free DP and with us rolling through February lets get some grain hauled before road restrictions. We still have plenty of room for all 3 commodities.
Boy, where did 2012 go? I haven't updated the blog in awhile.
The grain markets have been a wild ride here since this summer and now going into winter and planning for this upcoming growing season. Corn has been trading in a range since harvest. We seem to max out about 7.60 futures and bottom out about 6.50 futures. We will most likely continue to trade those values for a little bit yet till we get closer to spring and get to see what type of crop we will have the potential. Beans have been strong as of late but the looming South American harvest has been sitting there waiting to have an effect on the market. Wheat has been weak since harvest and probaly will continue to struggle to gain ground on its own due to big supply and what seems to be less than normal demand there is just no good news to give wheat a push by itself.
We have went to free DP on new deliveries of Corn, Beans, and Wheat so give us a call when you want to deliver. We have plenty of room right now so lets get some bushels in the elevator before spring hits and road restrictions are on.
Thanks and since I haven't said it on here, Thanks to all of our customers and we look forward to serving you again in 2013.
News today is the ag commodities at the Chicago Mercantile Exchange (Corn, Soybean Products, and Chicago Wheat are going to start trading 22 hours a day starting at 6 pm going to 4 pm the next day. With that news the CME is changing some rules on trading accounts.
Here is one news clip coming down the pipeline that I recieved in email.
Today the CME announced a rule change that will require CME members to be charged the full speculative margin requirements as of Monday.
Members at the CME (floor traders as well as many other electronic traders) were typically not asked to put up full margins for positions they held. Part of being a CME member was reduced trade costs and reduced margins which is all going to change on Monday. Some members were paying even less than hedge margins. Typically due to these significantly reduced margins these speculators were able to hold very large positions at very low cost. Obviously with most of the Ag markets moving higher, most of these guys were long and ran for the exit when they saw this news.
Let’s just say that a member held 1000 contracts of corn at hedge margins (which would probably be a high estimate) and all of a sudden they were asked to put up speculative margins. That would mean that trader would have to come up with $613,000 on Monday unless they exited their positions. That might help to show just how much of an impact this rule change will mean.
Watch out for more speculative exiting from markets leading up to Monday.
It will be interesting to watch the markets this week before the new trading numbers hours take effect next week.
Planting intentions and grain stocks reports came out this morning. Corn acreage came in 95.86 million acres about 1 million acres above the average trade guess. Grain stocks came in just below the average guess but a little tighter stocks than the market likes. The effect on corn +40 cents nearby futures +16 new crop futures.
Soybeans came in well under the average acre guess at 73.9 m vs 75.5 m. Once again lower stocks than the market likes so effect on the market is new crop up 53 cents and old crop up 47 cents.
Wheat also less acres to be planted and tighter stocks to result in up 48 nearby and up 51 new crop.
In short the market is using the planting intentions to do some influence on the market but with tighter that normal grain stocks the market has the bullish feel to it. For how long? Who knows if we have any drought concerns this summer it could push the market up pretty good, but continue the on the likely ideal planting conditions and good have adequate rains through the summer and we could be in for a rough summer market wise. Has any invented a time machine yet? HAHA!
We have had quite a run in the markets in the last 4 weeks. They have just kept creeping up and getting close to 8 week highs. The planting intentions report comes out at the end of the month. Corn has been expected to add acres across the board pulling its acreage from beans and wheat. Beans have been making a run lately so maybe we will not be losing as much acreage as we have thought.
Last Thursday we had the USDA released the January Crop Production report for the 2011 crop year. The report was bearish to what the trade was guessing it was going to say. Combine that with a strengthing dollar and reports of rain in South America and we had a 50 cent drop to close the week.
This week we are back to trading the news and that is weather in South America and watching the financial markets in the US. So we have the beans leading the way with less rain than anticipated and weaker US dollar. Corn and wheat following.
Happy New Year! The markets have been a up and down ride the last two months. We have went from recent contract lows to retraceing towards contract highs the last 3 weeks. The corn and soybean markets have been up on stronger economic news and drought condition affecting the South American crops.
Keep an eye on the nearby cash bids and if you see some numbers that you are wanting to sell make sure you give Kelly or myself a call.