GrainTV – September 30th, 2011

This morning’s Quarterly Stocks Report moved the market sharply lower, with the USDA reporting both corn and wheat stocks higher than private estimates. This report was just another shot to the grain complex following a month long sell-off spurred by a stronger dollar and a generally weak export market. Since September 1st we have seen the DEC corn contract trade from 766 down to 592 1/2 today and the NOV bean contract lose nearly 3 dollars, down to 1179. At these levels we expect to see end-user buying provide some support into next week, but market sentiment remains bearish. For a full breakdown of these and other stories affecting the grain complex, tune in to this afternoon’s broadcast of GrainTV. As always, follow us on Twitter to receive live market commentary sent to your mobile device.

Have a great weekend.

- Grain Hedge

GrainTV – September 29th, 2011

GrainTV went live this morning for the market open with grains trading slightly higher. On today’s broadcast our analysts look at weekly export data and take a look at some technical levels following last weeks sell-off. The market is really looking to tomorrow’s Quarterly Stocks Report for direction, so be sure to tune in tomorrow morning for a special GrainTV covering this report. As always, follow us on Twitter to receive live market commentary sent to your mobile device!

GrainTV – September 27th, 2011

Grains have continued higher this morning as weakness in the dollar has helped commodities bounce back from last week’s sell-off. At the time of this post, December corn is up 12½ to 660½ and November beans are up 11 to 1270½. Serious technical damage was done to the grains last week, and on this morning’s broadcast, Grain Hedge analysts look at retracement levels on the December corn contract. Tune in to this morning’s broadcast to see the full breakdown of these and other issues affecting the grains. To find out how easy live quotes are to get at home, click the following link to take a demo of the Firetip trading platform featured on GrainTV:

GrainTV – September 23rd, 2011

GrainTV went live this afternoon to wrap-up the week that saw corn trade down over 50 cents on the DEC contract and a full dollar taken off the NOV soybean contract. Weak export figures certainly didn’t help the grains this week, but massive liquidations in the equity markets plus a dollar index that gained 2% over the week were the main drivers. Tune in to this afternoon’s GrainTV for a breakdown of these and other issues affecting the grains. As always, follow us on Twitter to receive live market commentary sent to your mobile device! Have a great weekend.

Cash Market Commentary – September 23rd, 2011

September 23rd, 2011

As we continue to watch new crop corn basis levels throughout the month of September, it has become clear that the trend this year is drastically different from what occurred last year. The average new crop corn basis level today is 35 cents under the December contract, whereas last year the average basis level was 57 cents under the December contract. Over the course of September 2010, basis levels dropped an average of three cents. Since the first of September this year, new crop corn basis levels have actually strengthened an average of three cents. With basis levels 22 cents higher than what they were last year and continuing to strengthen, the incentive for producers to store their newly harvested crop is rapidly diminishing.

When looking at basis levels for spot delivery, last week we saw corn hold steady and soybean basis slide down 2 ½ cents on average. Major areas of weakness were seen across the lower plains and general weakness across the entire Corn Belt. The lower Mississippi River Valley was the only pocket of strength over the last week as many elevators made small basis gains, and we actually saw basis out of the Gulf strengthen by 12 cents over the past week. Keep in mind that last week we saw weakness out of the Gulf, so we could be seeing short term corrections from recent changes.

This kind of strength out of the Gulf is especially surprising considering that the export market has provided little basis support. Many export sales recently have moved to South American vendors as the Dollar has gained ground. This shift in export sales is concerning as we would expect to see U.S. soybeans very competitive on the world stage as our 2011 crop is harvested. With this being said, hope remains into November for exports to pick up as this year’s late planted crop comes out of the fields.

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Futures Commentary – September 23rd, 2011

Commentary for September 22, 2011

Fed Starts Operation Twist, Markets Crumble

Ben Bernanke and the Federal Open Market Committee (FOMC) announced the new measures being taken to boost the economy, which is know as Operation Twist, Wednesday. In reaction, the Dow had a major sell-off today and is down 775.26 on the week finishing trade Thursday at 10,733.83. Oil has tumbled $7.56 a barrel for the week to settle at $80.41 today. Gold, surprisingly enough sold off to the tune of $78.90 an ounce closing at $1,733.80, while the dollar index has soared to 7 month highs. The grain markets were not spared the massive meltdown.

Corn blew through more technically significant levels after the FOMC announcement and in conjunction with harvest pressure and weak demand. The grain has lost 42 cents this week ending today’s session at $6.50 on the December contract. Better than expected early yields, lackluster demand, and global economic jitters has led the market lower.

Exports did see an uptick and was reported as 627,400 MT, up 29.5% this week.
Soybeans fell through the lower end of the multi-month trading channel, down 72 ½ cents on the week to $12.82 on the November contract. The abysmal macro economic situation is taking its toll on the oilseed and export sales continue to be lost to South America. Adding to the problem is a strengthening dollar index, which has made soybeans less competitive in the export arena. Evidence appears from exports that were down 22.5% at 235,300 MT.

Wheat continues to slide lower losing another 54 ½ cents thru Thursday to close at $6.33 ¾ on the December CBOT contract. Heavy export competition, ample world supplies and a strong dollar index has pressured the market to a 2 ½ month low today. Commodity funds have contributed to the sell off, dumping about 6000 contracts today. Exports were reported as 886,100 MT, which is up 88 percent from the previous week and 63 percent from the prior 4-week average.

Massive risk aversion took hold of the equity and commodity markets after the FOMC released their newest plan to stimulate the slowing economy. It is clear now that the bull run is all but over for the time being, especially in the grain markets. A strengthening dollar, weak demand, and harvest pressure will keep a lid on prices in the near term. Attention will now turn to next Friday’s Quarterly Grain Stocks report.

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GrainTV – September 22nd, 2011

GrainTV went live this morning as grains continued their heavy selling during the night session, openinig sharply lower. At the time of this post DEC corn is down 24 at 661 3/4 and we have seen the NOV soybean contract trade down 31 cents to 1289 1/4 and break through the bottom of it’s $13 – $14 range. A stronger dollar, selling in equity markets, and competitor currency depreciation (specifically Brazil) have all contributed to this morning’s bearish trade. For a full breakdown of these and other issues, tune in to this morning’s GrainTV:

GrainTV – September 20th, 2011

In this morning’s trade it looks like Monday’s USDA figures are still giving some support to the bulls, but demand strength at these price levels remains an issue. At the time of this post grains are up across the board between 3 and 5 cents, helped out by a weaker Dollar in the morning trade. Tune in this morning to GrainTV for a complete breakdown of these issues, crop progress, and basis strength with Grain Hedge analysts. As always, follow us on Twitter to receive live market commentary sent to your mobile device!

GrainTV – September 16th, 2011

GrainTV went live this afternoon for a recap of what was driving the grain markets this week. Across the grain complex futures traded sharply lower during the week, and we saw several technical support levels broken for both corn and soybeans. Tune in to this afternoon’s discussion of these and other issues affecting the grain market. As always, follow us on Twitter to recieve live market commentary sent directly to your mobile device!

Futures Commentary – September 15th, 2011

The fall’s first frost scare did little to support the grains as the markets continue to tumble. The Dow, however, has managed to rally 441.05 on the week closing today at 11,433.18. Oil followed the index higher to $89.26, which is up another $2.25. The dollar index is down modestly this week, as is gold, which has fallen $76.10 to settle at $1,779.30 today. The grain markets are feeling the pressure of harvest.

Corn for December delivery has lost 35 ½ cents on the week to end trade today at $7.01. Early in the week, the USDA released its revised yield estimates and demand forecasts. As suspected, the yield was driven lower, but some of the supply concerns from the report were alleviated by downward revisions in the demand projections. Actual yield numbers are starting to be reported and are shaping up to be a little better than originally anticipated. Exports were reported as 484,900 MT, which is down significantly from previous weeks.

Soybeans have sold off significantly since hitting multi-year highs a couple of weeks ago. The oilseed is down 68 cents on the week for the November contract that settled at $13.58 ¾ today. The USDA increased the production forecasts adding fuel to the bears’ run. A light freeze was experienced in some of the northern growing regions, adding little support. Exports continue to disappoint and were reported as 303,400 MT, a slight up tick from relatively low figures.

Wheat continues to plummet and is down another 33 ¾ on the week to close at $6.96 on the December CBOT contract. A stronger dollar index in the last few weeks has forced the market to move to more competitive levels. Competition for world demand has been stiff with the biggest competition coming from the Black Sea area. Rains are falling in the Southern Plains, which will aid in planting of hard red winter wheat. Exports were 471,200 MT, which is down 25 percent from the previous week and 20 percent from the prior 4-week average.

A cold front passing along the Canadian border did little to support the markets as all three grain commodities were off sharply this week. The USDA released their monthly reports early in the week with rather mundane after effects. Harvest pressure and a stronger dollar are adding to the bearish sentiment. Focus will now shift to reported yields and the end of the month Quarterly Stocks report.
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