Corn was the only grain to close the year of 2011 in the black, while the rest of the grain complex was down for 2011, most notably Wheat, which fell almost 30% from the peak in February 2011 to the lows in late December.

In the New Year Corn was poised to continue their rally while Soybean and Wheat struggled to find direction. When the opening bell rang for the New Year all the grains gapped up higher at the open, but quickly lost their gains and started to decline into the first week of trading. Trading volume was light as many traders were slowly returning from the holiday season. Grain traders were also waiting for the 2012 USDA Crop report to come out on January 12th as it would set the trend for the next few weeks.

Grain prices were sideways during the first two weeks of trading, but quickly turned lower once the USDA numbers came out. The 2012 USDA report came out bullish which shocked the market especially, Corn traders who thought the uptrend would continue. Corn futures opened limit down that morning and locked limit down for the whole season. With Corn closing the day at their exchange imposed daily limit of negative 40 cents, Corn’s price limit was expanded to 60 cents for the following trading day.

Soybeans and Wheat also took a plunge after the markets opened on the 12th. With two weeks left in the first month of the New Year, prices hit a reversal during the third week of January. Prices slowly started to trade higher day by day, and eventually a complex rally was being established. Corn, Soybeans, and Wheat rallied higher into the last week of trading to close in the gap that occurred after the USDA report, and continued to advance. Corn futures experienced huge price movements but eventually were able to rally back to the prices that were seen at the first of the month.

Corn futures closed the month at 6.4175 per bushel. Soybean futures were able to settle above 12.00 a bushel for the first time since late December at 12.19 per bushel. Wheat futures took on the biggest price gain as they closed above their opening price on the first trading day for 2012. Wheat futures closed the month at 6.7425 per bushel.

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