The opening call this morning was expectedly lower following the bearish USDA supply and demand report this morning. March obliged and ticked open some 60 lower initially, before being dragged further down on the re-opening along with March and July pressure.
Funds were decent sellers early on sell stops, whilst the underlying theme was for a lack of bids from any camp. The March careered lower towards 53.00 and actually ticked through this level, however there was some decent commercial support at these levels.
This support was most notably visible in the new crop December, which refused to move in sync with the spot contract, reflecting support from the stratospherically priced grains complex today. Corn was limit up bid on the opening, whilst beans and wheat both touched or neared limit up throughout the session.
Ideas that acreage switches are increasing with every cent rally in grains, and as such hedge funds were very active buyers of the Dec 07 contract.
Following this support, the commercials began to chase the front months up, trying to lift hedges against recent export sales. This buying spurred both local short covering as well as fund buy stop triggers above 54.25, and it was with some surprise that traders looked up to see March over 100 higher after the first hour.
Prices chopped back and forth in positive territory for much the rest of the session, gaining undisclosed support from grain following hedge funds. Itwas finally an active, large volatility day, with an estimated 33,925 contracts changing hands.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
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