GRAIN COMMENTS FOR 2-22-2012

CORN

• It was a quiet narrow range trading session for the corn market until late in the day when the bullish traders jumped into the corn pit.  Fundamental news was quiet as corn traders wait on comments from the USDA.
• The 2012 USDA Outlook Conference starts tomorrow.  The USDA will release their first look at their projections for 2012.  The comments will come first with the long range numbers to follow.  The corn market will react upon their release.
• Bull spreading was active during the session.  Ahead of reports, the volume for this type of trading increases.  Traders want to make a commitment but many consider this type of trading has a smaller amount of risk. 
• Delivery of corn from the Ukraine to Japan is at a standstill because of frozen ports.  This could send some spot business to the United States.
• The corn charts show a choppy, sideways trading pattern for the last 30 days.  The 50-day moving average has held support.  This is major support under which sell stops are building.
• A trade to consider is buying the old crop versus new crop corn spreads.  The July versus December corn spread has been in a sideways trading pattern for the last 30 days.  Today, this spread closed at 79 ¾ cents.  A breakout on the charts would occur on a close above 83 ¾ cents.  The risk is a close below 70 cents.  The spread could travel to $1.00 as the first objective.    

WHEAT

• The wheat market recovered from a soft opening.  A round of buying at the close pushed the price to the high of the session.  Demand remains the best supportive factor.
• The export lineup sheet is long for world wheat demand.  Numerous countries have issued wheat tenders.  The United States is in a good position to move some wheat especially in the soft red winter wheat classification.  The price of Chicago wheat contracts should outrun the Kansas City wheat contracts based on demand. 
• The Ukraine government announced they are still in the wheat export business despite wire services reports.  Their ports are frozen so they will have a hard time filling spot wheat demands. 
• India could start exporting wheat at harvest time.  With their current wheat production projections, they could sell a considerable amount of wheat compared to their token amounts this year to neighboring countries. 
• The wheat price charts show a down trending market that is approaching an oversold condition.  The price for the March Kansas City wheat contract is hovering around the 50-day moving average. 
• Today, the outside markets provided a slightly bearish signal for the grain markets but grain traders ignored the fact. 

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