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Grain Spreads: The Edge of Wetness


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Massive rains are forecasted to enter into the Midwest growing areas this weekend and through most of next week. The continued rains have given thoughts to continuing planting delays for corn as the last progress report showed only 30 percent planted vs a five year average of 67. Late planting threats we discussed in Mid-April finally have begun to matter as funds who have been short over 350 K contracts, have begun to cover their corn positions while new longs enter the fray as volume and open interest increased late this week. July 19 corn rallied 41 cents from Monday's low while new crop Dec rallied 36 cents and now sits just below 4.00. Beans are now the weakling for the time being as the gov't is talking subsidies for bean growers similar to last year of a 1.50-1.85 per bushel. Lots of noise out there and rumor regarding trade and government assistance. Depending on planting progress corn may only be two-thirds planted by the first week of June. We may be at 50, or we could be at 80 percent by June 3rd. Weather will obviously be key the next two weeks if the planting window opens. Knee high by the 4th of July? Probably not in most areas. Late entry into the fields has finally started to matter. July corn has major resistance (green line) on chart at 388/89. The 200 day moving average is at 387. Its a big level in my view. A close over and its 398 and then 405. Support is just below at 379.4. A close below and its 375 and then possibly 368.2. The 100 day MA is 371. Then next two sessions should see some increased volatility on the charts predicated by weather events. Please join me for a free grain and livestock webinar every Thursday at 3 pm. We discuss supply, demand, weather, and the charts. Sign Up Now

Sean Lusk

Director Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

slusk@walshtrading.com

www.walshtrading.com

Walsh Trading

53 W Jackson Suite 750

Chicago, Il 60604

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About the author


Sean Lusk is a registered commodity broker and Director of the Commercial Hedging Division of Walsh Trading in Chicago. Sean began in the business as a runner on the trading floor during summer breaks from college in 1993. Upon his graduation from Southern Illinois University at Carbondale in 1996, Sean began his career on the trading floor of the Chicago Mercantile Exchange (CME). Overseeing billions of dollars of transactions working as a clerk in the Eurodollar pit, Sean took the next step and became a floor broker and member of the CME in 2003. He handled customer orders for banks and investment houses from all over the world from inside the Libor pit at the CME.

Now, at Walsh Trading, Sean utilizes his experience in the marketplace and his professional client service skills to aid and assist customers in their trading endeavors.  

He writes daily and weekly commentaries focusing on both the Precious Metals and Agricultural Markets along with related market activity.

Sean has been quoted in various media outlets discussing futures markets. 

These include:

 

  • Futures Magazine
  • Reuters
  • Forbes
  • Kitco
  • Nikkei Press
  • CCTV.com

 

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