Opening Grain Market Comments 4-11-11 Did we make the corn highs last night?

Markets are called mixed this a.m. after a rather volatile overnight session.

In the overnight session corn was up 2 in old crop, NC corn was off 3-4 cents, beans where down 10-11 cents, KC wheat was down 14, MPLS wheat was down 10, and CBOT wheat was down 3.  At 9:00 outside markets have European wheat slightly firmer, equity markets are firmer with the DOW up 58 points, crude is down 60 cents, and the US dollar is slightly weaker with the June down 98 at 75.175.

Friday we had a USDA report that was bearish in the sense that numbers came in above trade estimates for old crop stocks; yet the market turned and put in solid gains despite the early calls that where down 10-20 cents.  Last night we followed up last week’s strengths to put in new highs in corn; all time highs on the continuous chart. 

Technically it is a little scary when we see new highs followed up by reversals which looks like is a possibility today.  Watch out for Friday’s lows as an area where we could see increased selling pressure should they fail to hold.

Fundamentally the game really hasn’t changed lately; we have tight old crop supplies of corn and beans as well as other specialty commodities like sunflowers.  Those tight old crop supplies leave the doors open to new crop situations that are also tight at least until the point we curve some demand or find some supply.   Bottom line we have been in sort of an acre war and that looks to continue.  As for pricing and risk management keep in mind that even if there is an acre war today; sometime in the near future we will realize that not all playing the acre war game really want to be.  I.E. many end users don’t like these prices and could care less to own at these levels; so there is and will be risk of buyers not wanting to support until we see some sort of massive break.  This mentality or the idea of not wanting to be long and wrong helps to add to our volatile price action; as does the thinking that producers get from time to time of not wanting to sell to early in case it continues to go up.  These actions can help create more or less implied supply or demand then is actually there at times.

We do have crop progress/conditions out this afternoon; in which we could start to see some planting progress for more of the row crops.  Wheat condition has been on the historically low side; part of the pressure in last nights market appeared to be some rain forecasts for much of the HRW growing area.  The other thing that we will have out this am is export inspections; can we continue to lag what is needed without seeing our balance sheets suffer?

For a couple years we have help sponsor grain marketing workshops; one of the main points of those workshops was the seasonal tendencies.  We appear to be very near the start of the fear time; when one would be saying “don’t forget to sell something”.

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