Trading Tips for Farmers By JC Hoyt

JC Hoyt is Managing Partner at GoGrain LLC, a Discount Commodity Futures Trading Online firm specializing in helping farmers find their best cash prices and managing risk in commodity markets in real time mark-to-the-market programming. He is a 20-year veteran of the grain markets, working with producers for agribusinesses Harvest States, Pioneer, and Koch Industries.

 





Equities Trade Sideways as Commodities Soar  

This week in the markets was similar to last as equities and commodities moved in opposite directions, the only difference being in which direction.  The Dow slowed its upward movement, only gaining 41.32 to 10,465.94 at the end of trade today.  Oil has slid 10 cents to $78.95 this week.  Gold has followed the steep decline of the dollar index, falling $5.10 to $1,181.70 today.  Wheat was again a driving force in the rally for the grain markets.

            Corn has approached the $4.00 level on the December contract, settling to $4.06 ¾ up 22 ¼ cents this week.  Wheat has been a major driving force for the corn market as it competes for feed prices with corn.  Exports have been solid and were reported as 1,199,200 MT, which is up 26 percent from the previous week and 21 percent from the prior 4-week average.  Crop ratings remained constant with a couple of percentage points moving from good to excellent.

            Soybeans have managed to eke out a 23 ½ cent gain on the November contract to finish trade today at $10.05.  Weather and crop conditions have been a concern for the grain as we head into the bulk of the growing and pod-setting season.  Conditions did improve, however, and exports were reported as 178,600 MT, which is down 35 percent from the previous week, but up 3 percent from the prior 4-week average.

            The real story in the grain pits lately has been wheat.  The grain is benefiting greatly from a major drought that is occurring in Russia, ending trade today at $6.92 ¼ up 65 ¾ on the week.  The government there is estimating that its grain exports will be reduced about 50% this year.  Funds have invested heavily this week purchasing about 30,000 contracts.  Exports were reported as 451,300 MT, which is down 17 percent from the previous week and 10 percent from the prior 4-week average.

            The equity markets have moved sideways to lower this week, where as the grain markets have had a slight rally.  Wheat is the real driving factor behind the upward movement as a severe drought in Russia is increasing the demand for U.S. wheat.  Corn and soybeans have followed with little by the way of news has found the markets.  Traders and producers alike are looking ahead to the August 12th crop production and supply and demand reports.