GrainTV – December 30th, 2011

GrainTV looked back at the week’s trade this afternoon, with grains trading higher across the board. Export sales figures and expectations for the New Year are discussed on today’s show, tune in for the full report! Have a great holiday weekend and we will see you back here on Tuesday.

Corn Positive for 7th Session in a Row, Hits Six-Week High

The grain complex finished sharply higher, fueled once again by the persistent heat in Brazil and Argentina and bleak precipitation outlook there for the coming week. At the closing bell Corn finished up 14 cents, Wheat up 21 3/4 cents and Soybeans up 34 cents.

Today’s strong push higher helped turn some technical indicators more bullish in the short term, but market participants should remain cautious since these levels were achieved on weak holiday volume. Corn, Soybeans and Wheat were all able to break through their 50 day moving average resistance, which triggered more intense short covering during today’s session. Corn should start to see some resistance around $6.40 as we approach the bottom side of the range we traded in much of October and November.

The dollar has not played a significant role in determining grain prices for three days now, but it will most likely become a bigger factor later this week. The dollar index should continue to trade sideways with support at 80 until we see fresh news out of Europe. Our eyes will be focusing the Italian Bond sale scheduled for Thursday as it will be the first real test of demand since the dramatic ECB liquidity operation. Be sure to check our blog on Thursday to see the results.

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

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GrainTV – December 22nd, 2011

Grains continued higher today with corn up 7, soybeans up 12, and wheat up 7 at the time of this post. A higher close today would mark the fourth straight positive day, but keep in mind we have seen light volume this week. Corn is trading at 623, just 5 cents below the 50 day moving average. Additionally, we see the 100 day moving average just 2 cents above the 200 day moving average with a convergence expected in the next several sessions. For a full report on what these technical signals mean for the grain complex, tune in to this morning’s GrainTV.

Grains Rally This Week on Light Volume

The grain markets have soared this week aided by drier South American weather,
a weaker dollar index, and positive economic news. The Dow Jones index has rallied
308.63 points to end the session Thursday at 12,169.65. Oil has raised $5.43 a barrel by
the end of trade today to settle at $99.83. Gold has found support after a sharp sell off
last week closing today at $1,605.60, which is up $9.60 an ounce. A modestly weaker
dollar index has added strength to a commodity rally this week.

Corn settled at one-month highs today after rallying for the fifth consecutive day.
The March contract has tacked on 34 ½ cents to finish at $6.17 ½ today. A drier, hotter
forecast for Argentina and Brazil came out mid-week and pushed the market higher
hitting pre-placed buy stops along the way. Assisting in the rally was a weaker dollar
index and better than expected export sales. Export sales were reported as 715,000 MT,
which is up 42% from last week.

Soybeans have enjoyed a six-day rally while managing to gain 32 ¼ cents this
week to close at $11.62 ¼ on the January contract Thursday. The drier weather in South
America is helping the rally as is a weaker dollar index. The market is currently butting
up against a couple of key technical resistance levels in the $11.60-11.70 range. Export
sales again beat expectations at 653,400 MT, which is up 39% from last week.

Wheat had the biggest rally of the week and is up 39 cents on the March CBOT
contract after the session Thursday. The grain benefited mostly from a weaker dollar
index and an improved global economic outlook. Fundamentally, there is still a large
world supply, especially feed quality wheat, which will cap further advancements.
Export sales continue to be mostly routine business and were reported as 362,300 MT,
which is up 14% from last week.

Santa Claus appears to have visited a little early from a producer’s standpoint
with double-digit rallies in the grains complex this week. South American weather is
adding a premium into the market, the dollar index is weaker, and a better global
economic situation is shaping up. All in all, the last few days of the year has offered up
some pretty good prices before attention turns to the January USDA reports.

Brock Schimbeno – Grain Hedge

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

Cash Commentary – December 16th, 2011

With the strongest spot corn basis levels seen in five years, producers should look to take advantage of this strong basis before it disappears. Over the last week spot corn basis remained unchanged after small weekly gains since early October. Right now basis levels are around 24 cents stronger than their five year average and 16 cents above the maximum basis seen during the last five years. These strong levels are beginning to plateau and may even begin to weaken if Gulf basis continues to slide.

Over the last seven days basis out of the Gulf has decreased three cents resulting in aneight cent decline for the month thus far. As we have seen in weeks past, when the Gulf moves, river terminals follow. This week elevators along the major river systems dropped basis two cents. Ethanol plants also followed the trend dropping basis a cent and a half.

Bottom line, take advantage of these strong spot corn basis levels now before they start to weaken. Contact us here at GeoGrain so we can help you find your best cash market or visit our website for a free cash market analysis of your area.

GrainTV – December 16th, 2011

GrainTV went live this afternoon for the weekly recap show. We saw grains rally hard into the close today, ending a week that saw corn and wheat trade lower while beans made up some ground. In today’s broadcast, Cody and Brock discuss South American weather, Informa’s acreage projections, and the Dollar Index. Tune in for the full report!

Are the Bears Stealing Christmas?

Early in the month, the markets appeared poised for a “Santa Claus” rally, but now it appears that the bears are stealing Christmas.  The Dow has fallen 315.45 points to end trade Thursday at 11,868.81.  Oil received a supply shock, stemming from an OPEC meeting, which sent the commodity down $6.18 a barrel to end trade today at $93.46.  Gold has been blistered by losses of $137.40 an ounce to settle at $1,573.40 Thursday.  The dollar index has rallied sharply higher as the Euro currency has tanked.  Agricultural commodities have been mixed so far this week.

Corn has touched 9-month lows this week and has lost 15 ¼ cents on the March contract to settle at $5.79 today.  Technically, the grain is in very rough shape after testing support in the $5.80 area.  Fundamentally, there is little supportive news and traders are anticipating the January 12th Supply/Demand and Crop Production to give the market direction.  Speaking of fundamentals, export sales were reported as 504,700 MT, which is down 27% from last week.

Soybeans have been the lone bright light in a string of dead bulbs.  The oil seed is up 4 ¼ cents this week to finish trade at $11.11 ¼ on the January contract.  Technical support has held for this market in the $11.00 area.  The sharply stronger dollar index has put a cap on any rallies however.  Demand outlooks are uncertain and ending stocks are ample.  A supportive factor comes from weather concerns in South America.  Export sales were reported as 468,600 MT, which is down 39% from last week.

Wheat has lost 16 ¾ cents on the CBOT March contract to settle at $5.79 ¾.  Fundamentally, this market is very weak.  The world stocks are near all-time highs and export competition has been stiff.  Adding to the downward pressure is the sharply stronger dollar index.  There is still a very nice premium for high-protein wheat based on the Minneapolis and Kansas City grain exchange contracts.  Export sales remain routine and were reported as 318,400 MT, which is down 25% from last week.

As we head towards the New Year it seems less likely that a “Santa Claus” rally will happen and more likely that the bears will steal Christmas.  Supportive news has been few and far between for the markets of late.  Technically, we are sitting near some key support levels which will be important to keep an eye on.  Light volume and choppy trade should be expected heading into the New Year.

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

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GrainTV – December 15th, 2011

GrainTV went live this morning with grains trading mixed on the open. Export sales for wheat and corn met expectations while soybeans came in slightly lower than expected. Today’s report wasn’t a game changer and it looks like the trade will remain focused on the Euro zone and a strong dollar moving forward. For a full breakdown of these and other issues affecting the grains, tune in to GrainTV!

GrainTV – December 13th, 2011

GrainTV went live this morning for the market open with grains showing. At the time of this post we have corn up 1 1/4, soybeans up 8 3/4, and wheat up 8 1/4. On today’s broadcast, Kevin and Brock discuss the recent strength in the dollar index, gulf export basis, and where they think the grain market is headed from here.

Will European Summit Provide Direction for Grains?

The leaders of the European Union are meeting today and Friday to decide on which direction to take on the sovereign debt issues.  The Dow is holding steady and is expecting positive news from abroad.  The index is down 21.72 to 11,997.70 as of the close Thursday.  Oil fell sharply today and is down $3.10 overall this week to settle at $97.90 a barrel.  Gold is off $37.80 an ounce to finish Thursday at $1,707.90.  The dollar index is up slightly adding resistance to the grain markets.

Corn was one of the bright spots in the commodity markets.  The grain is up 5 cents on the week to end trade at $6.00 ¼ on the March contract today.  This area will provide resistance for the time being and nearby support is in the $5.85 area.  One of these levels will most likely be tested tomorrow as the USDA will release its latest recent Supply/Demand report.  Export sales rebounded and were reported as 695,500 MT, which is up 148% from last week.

Soybeans remain technically and fundamentally weak and are down 4 ¾ cents on the week to finish trade at $11.31 on the January contract.  The $11.20 area has provided good support of late, but estimates are for the USDA to raise its ending stock projections in its monthly report tomorrow.  If this comes to light, this support area could breakdown.  Export sales were above expectations at 770,400 MT, which is up 57% from the previous week.

Wheat has been the leader to the downside and is off 28 ½ cents this week to end trade Thursday at $5.97 on the March CBOT contract.  Wheat is now resting in the $6.00 long-term support area and the fundamentals continue to pressure the market lower.  The USDA reports will mostly be neutral on Friday as most of the estimates will remain unchanged.  Export sales remain routine in nature and were reported as 427,200 MT, which is down 15% from last week.

The equity and commodity markets are eagerly awaiting news out of the European Union summit tomorrow.  Adding to the anticipation are the pending USDA Supply/Demand reports to be released at 7:30 AM CT.  The lone bright spot for commodities is corn in what has been an otherwise mundane week.  Currently, the grain markets are resting in some key support areas to watch moving forward.

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

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