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RSS By: Dustin Johnson

Dustin works with a wide net of large producers throughout the Midwest. His analytical market approach and objective hedge strategy development is specific to the needs of every individual.

Good crop ratings weigh on prices 8/25/09

Aug 25, 2009
 
SETTLEMENTS 8/25
         
 
Sep 09 Corn
320  
- 9 ½
Dec 09 Corn
325 ¼
- 10 ¼  
Nov 09 Beans
996 ¾
- 10 ¾ 
Sep 09 Wheat
468 ¾
- 3
Sep 09 KC Wheat
502 ½  
- ¾
Sep 09 Min Wheat
537 ¾   
- ¼ 
Dec 09 Meal
298
- 1.9
Dec 09 Oil
37.18
- 0.54
 
 
 
 
 
 
 
 
 
 
 
 






Corn, soybeans and wheat all closed lower. After yesterday’s sharp gains, a sharp jump in corn and soybean crop conditions helped weigh on prices overnight and during the day. Crop conditions are now among the highest on record for both corn and soybeans. Strong September soybeans and soybean meal prices helped pull the entire complex higher early in the day. September soybean futures are the last “old crop” contract. There are very few “players” left in these contracts and the price is disconnected from new crop soybeans. What the September contract does depends on who NEEDS to buy some soybeans before harvest or who NEEDS to sell some before harvest. Last year, for example, September soybeans rallied $2.70/bushel on the last day to close at $14.90! (November soybeans then broke $4/bushel heading into harvest!) So, looking at September soybeans as a barometer for November soybeans is not a good strategy.
            Very favorable growing conditions look to persist over the next two weeks. There is still a slight chance for a frost in the extreme northern areas this weekend. This is keeping prices supported for now and the situation will need to be monitored. Obviously a frost this early would be bad for any areas affected. However the crops are getting bigger and without a frost, prices are heading lower. If instead of an early frost we get a late summer, I believe both corn and soybean yields will be records. Many people are already talking about the potential of a record corn crop, but very few are even hinting at the possibility of record soybean yields (I think because corn prices have broken but soybeans haven’t). August weather has been ideal and if we have a late frost we will have a record crop. Again, this all depends on when our first frost takes place. If we have an early frost, everything I said is irrelevant. Soybeans are at $10/bushel. As a producer, you need to do something to protect these levels. By the time you are “sure” your crop looks good and there aren’t any production risks ahead, it will be too late. There are some very reasonable options to buy if you are worried about making cash sales. Give us a call if you have any questions.
           
 
 
 
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