Will a Weaker Dollar Spark Grains Higher?

Debt resolution in the Euro-zone will have a profound global effect.  Most notably, the dollar index should weaken substantially.  A weaker dollar is beneficial for commodities that are U.S. dollar denominated, especially the grains and crude oil as they will become more competitive in the world marketplace.  We saw a large rally in the Dow with the index up 399.76 as of the close Thursday to finish at 12,208.55.  In conjunction with the dollar tanking, crude oil has spiked $6.14 a barrel for the week to settle today at $93.76.  Gold has once again rallied to relatively high levels at $1,735.50 an ounce, up $95.50 this week.  The grains have benefited mostly from a weaker dollar.

Corn has continued to trade in a relatively tight range and is only up 1 ¼ cents on the December contract this week settling at $6.51 ½ today.  With little fresh fundamental news to give the market direction, corn has traded mostly sideways since October 11th.  The $6.50 area is providing heavy resistance and a nearly finished harvest is adding pressure.  Export sales fell off sharply and were reported as 677,100 MT, which is down 81% since last week.

After a sharp sell-off last week, soybeans have been the leader to the upside gaining 22 ¾ cents on the November contract to settle at $12.35.  Producers and traders alike will begin to focus on South America as their planting is advancing quickly. South America is anticipating a record crop this year adding to the competition for exports.  As with corn, exports were abysmal at 227,600 MT, which is down 62% from last week.

Wheat narrowed its gap with corn this week adding 12 cents to the December CBOT contract to settle at $6.44 today.  Drought conditions continue to be a concern for producers in the Southern Plains keeping a solid base under prices.  There is little precipitation in the forecast to alleviate the severe drought ahead of winter.  Export competition remains stiff with little more than routine business being reported.  Exports were 316,800 MT, which is down 21 % since last week.

Some measures were taken by the Euro-zone to alleviate the debt concerns and as a result the dollar index has plummeted to the benefit of the grains.  The equity markets also enjoyed some good gains this week.  Little has changed fundamentally for the grain complex with attention turning to South American planting and the dollar index.

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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Can Euro Zone Stability Propel the Grains Higher?

Corn, soybeans and wheat all traded lower today as uncertainty about the Euro Zone debt resolution weighed on prices. December corn, again, traded above 650 for a time in the overnight session only to fall 13 ½ cents to finish the day at 637 ¼.  A rather large 22 ½ cent range was traded.  With harvest wrapping up in some areas, producer selling has picked up and will weigh on prices in upcoming sessions.

Soybeans finished at the lower end of a 23 ½ cent range, ending the session off 14 cents at 1219 ¾ on the January contract.  Pressuring the market lower is a nearly complete harvest and a quickly advancing South American planting.  A slightly stronger dollar contributed to the losses.

Wheat was the leader to the downside in the grain pits losing 16 ¾ cents on the December CBOT contract to finish at 619 ½.  A wide 26 ¾ cent range was traded.  A stronger dollar and anticipation of weak export sales tomorrow sent the market lower. Egypt continues to snub the U.S.for its import needs with their most recent purchase going to Argentina.

The equity markets reacted positively to news out of Europe as it pertains to their debt crisis.  A sharp rally in the outside markets could raise demand prospects for the grains sending dollar index lower and prices higher.  Export sales are released tomorrow before the day session and it will be interesting to see if China is a featured buyer.

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

GrainTV – October 25th, 2011

GrainTV went live this morning for a recap of what has been driving the grain markets. Chinese demand was the story across the newswire this morning, with China’s National Corn and Oilseed Information Center reporting they will need 3 million tonnes more corn than was reported by the USDA. This hasn’t pushed the market much higher in today’s action, with corn up 2 and beans up 5. Tune into this morning’s GrainTV for the full report!

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Are We Close To A Break Out?

Today will be the first in a series we are calling Technical Tuesdays. Every Tuesday moving forward we will take time to breakdown price movements on corn, soybean, and wheat charts. Technical analysis is only part of the equation that producers should be looking at when marketing grain, but it can provide important insights into near term price movements and long term trends.

This week we highlight a bull flag that has developed on the DEC corn daily chart. Each candlestick below represents one day’s price movements, and you can see that following the near limit up day on October 11th we have settled into a range between 630 and 655. This move on October 11th forms the flag pole, and the range we have traded since then is the flag.

Technicians look for a break out to the upside out of a bull flag, with upside potential being equal to the length of the flag pole. This is especially true when the flag pole was formed on a day with strong trade volume, as we saw on October 11th. A move like this would put us in the 688 range, and this would fill the small gap-down move on September 22nd. There seems to be fundamental information today out from China that supports this technical analysis, but we believe that a move higher will only be an uptick in a otherwise downward trend. To do some of your own chart analysis from home, take a demo of the Firetip platform today!


THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

GrainTV – October 21st, 2011

GrainTV went live this afternoon for a recap of what has been driving the grain market over the last week. Chicago wheat and corn both ended the wheat slightly up, but beans really took it on the chin – closing down 58 cents on the week. While beans are looking weak in Chicago, we actually see strength in the cash market as we approach the end of harvest. Tune in for a full breakdown of these and other issues affecting the grains.

Have a great weekend.

Cash Market Commentary – October 21st, 2011

Throughout the month of October spot soybean basis levels have increased an average of 17 cents. Coming out of summer basis levels were signaling producers to store their soybeans right out of the fields and wait for basis levels gain strength. This year as compared to last has presented a completely different marketing strategy. During October 2010, spot soybean basis actually decreased 10 cents and rewarded farmers with higher basis when they sold their crop right out of the field. Today the average spot basis level is 19 cents higher than what it was a year ago.

The largest gains in spot soybean basis have been along the major river systems. Contrary to seasonal rates, barges have actually lowered prices by six cents since the beginning of the month. These lower rates have allowed river terminals to increase their basis to in return feed the demand of the export market coming out of the Gulf. River terminals have posted an incredible 32 cent basis increase since the first of the month with soybean crushing facilities close behind at a 21 cent increase. The combination of lower barge rates and an eight cent basis gain out of the Gulf has sparked positive basis movements in the spot soybean market.

To learn more about GeoGrain’s cash market intelligence dial 1-866-290-1196
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Weekly Wrapup–China and Greece Lead to Mixed Results

China’s economic slowdown and Greece’s continuing debt issues have left the global marketplace on edge this week.  Volatile and choppy trade has hit the Dow ultimately ending Friday at 11,808.79, which is up 164.30 on the week.  Oil fell $0.35 to settle at $87.62 today as a slowing economy is hurting demand prospects.  The dollar index gained slightly while gold tumbled $43 an ounce finishing at $1,640 Friday.  The grain complex is mixed for the week.

Corn has traded in a relatively tight range this week with little fundamental news to spark the market in any direction.  The December contract has added 9 ¼ cents to settle at $6.49 ¼ today.  The $6.50 area has provided resistance all week as the grain has failed to move solidly past this technical barrier.  Harvest progress has moved rapidly in the dry areas of the Midwest, but delays are being experienced in the soggyEastern Corn Belt.  Export sales met the lower end of expectations at 1,762,600 MT, which is up 40% over last week.

Soybeans are weak both from a fundamental and technical standpoint.  The oilseed has not gained any day this week and is down 57 ¾ cents to $12.12 ¼ on the November contract. China’s announcement of a slowing economy hurt this market the most asChinais the world’s #1 importer of soybeans. Chinadid purchase a good deal of soybeans for the weekly export numbers, but we still fell short of industry expectations at 594,700 MT.  Harvest is nearly complete in some states as favorable weather has aided progress.

Wheat has followed corn’s lead this week trading a tight range and adding 8 cents to finish Friday at $6.32 on the December CBOT contract.  With ample world stockpiles and heavy competition abroad for export sales the market has little to get excited about.  Winter wheat planting progress has slowed as many areas are in dire need of a drink.  This weekend’s forecast has light rains to offer, certainly not drought busting.  Exports remain routine and at the lower end of expectations at 399,400 MT, which is down 17% from last week.

Global economic uncertainty has again found its way into our markets.  Most of the markets were down on the week, but corn and wheat have held their own.  Soybeans took the news hardest.  In the weeks to come, traders will focus on final yield results and the ongoing South American crop planting.

To speak directly with a broker dial 1-877-472-4607

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Visit us online at www.GrainHedge.com

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

C1Z Finding Resistance at 650

December corn is pushing right up against the 38% retracement of the August 29th high to the October 3rd low. The DEC contract had a strong close today, but was still unable to settle above 650. Another positive day in the market could lead corn to break-out of the consolidation it has been printing for the last week and a half. If a break-out does occur, look for serious resistance around the 675 level. This area was not only an area of choppy trading during July but is at the 50% retracement of September’s sell off. To track this contract on your home computer, take a demo of the Firetip platform today!

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.

PLEASE READ OUR RISK DISCLOSURE.

GrainTV – October 18th, 2011

GrainTV went live this morning for the market open with grains continuing overnight selling into the day session. At the time of this post we see DEC corn down 2, NOV beans down 12, and wheat hanging in there, down 1 to unchanged. This morning on GrainTV analysts take a look at the dollar index chart and the implications dollar strength will have for the grains moving forward. Our analysts also look out to 2013 contracts and discuss pricing grain now or letting the market ride. Tune in to this morning’s broadcast for a full breakdown of these and other issues.

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.

PLEASE READ OUR RISK DISCLOSURE.