Weekly grain report

Byron Behne watches the grain markets for the Odessa Union Warehouse.

5/18/12: It’s certainly been quite a week in the wheat markets as Chicago futures rallied nearly a dollar per bushel since Tuesday. New-crop soft white prices benefited much more than old crop but both enjoyed nice gains, although not nearly what futures were able to do. Basically the pressure of speculative liquidation from the past two weeks finally lifted, and then concerns over world weather for new-crop wheat started to pop up. Dry weather developing in Russia has the markets on edge after what happened two years ago. There has also been increased winter damage to the European wheat crop and dryness beginning to affect Australian planting. So we’re now in full-on weather market mode, and future rainfall and temperatures will determine where we go from here.

5/21/12: The markets survived the first day of 21-hour futures trade, but it was certainly a wild one. Grain futures now open at 3 p.m. Pacific time and don’t close until noon the following day. Overnight, Chicago wheat futures ranged 40 cents, from up 20 to down 20, before coming back to even around where the traditional trade would have started the morning. The close of futures is definitely odd now with the standard pit trade closing at 11:15 a.m. just like it always has but the electronic trade continuing till noon. Closing prices for the day are based on the pit even though the electronic market keeps going. Futures lost about five cents after the pit closed, but the closing settlement prices reverted back to where the pit closed before opening this afternoon, where the electronic trade stopped at noon. Confused yet? You aren’t alone.

5/22/12: Commodity markets were under pressure once again with corn and soybeans having particularly bad days. There were rumors of old-crop purchases by China being canceled in both and rolled to new crop. Wheat was certainly due for a breather after its furious rally last week, and pressure from the row crops gave it the opportunity to break. There are increasing chances of rain in the Midwest, however not much relief in sight for Russian grain areas.