It has been a weaker overnight trade of CME corn, soybean, and wheat as a cool front pulled southeast across the area and produced showers/storms across the Midwest. The best rains fell across North east Iowa and Southern Wisconsin where totals ranged from .2 to 1.00 inch. Most rainfall amounts elsewhere ranged from .1 to .6 inches, which are far too minuscule to end the drought of 2012. We would estimate 15 % of the area experienced rains of 1 inch or more; we would term the overnight rains as disappointing. The major forecast models are apart on the 10 day US outlook with the EU model again being much drier than its US counterpart. Since the EU model did such a good job with the current weather development, this is the model we should follow.
A spread idea we like is long December Kansas City wheat and short Minneapolis wheat. The spring wheat harvest going on in North Dakota is going well and this is the spring wheat we trade at the Minneapolis Grain exchange. There is a strong seasonal tendency for Kansas City wheat to gain on Minneapolis wheat going into the end of August.
August 10 is the next very big crop report. Wait until this crop report comes, but another good idea for a spread is buying March 13 corn and selling December 13 corn against. When the highs are in on the corn market, you will see March 13 corn gain on December 13 corns. This can work for hedgers and speculators alike.
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Stephen Davis
Senior Commodities Broker
Stephen E. Davis is a 25-year+ veteran of the markets, who has spent the past nine years as a retail broker with RJO Futures. He is a graduate of the University of St. Thomas in Minnesota, and started as a runner at the Mid America Commodity Exchange in 1981. Davis' past experience involved working with firms Stotler Grain, O'Connor Grain, Dean Witter, R.J. O'Brien, and Rosenthal Collins. His trading floor experience in agriculture and financial markets is the foundation of his brokerage approac.... Read More
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