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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.

Heavy Rains in Argentina Drive Grains Lower Once Again

Feb 03, 2009
SETTLEMENTS
             
Mar 09 Corn
361 ¾
-8 ¾
May 09 Corn
372 ¾
-9
Mar 09 Beans
946
-13 ½
May 09 Beans
950 ¼
-15 ½
Mar 09 Wheat
552 ½
-11 ¼
May 09 Wheat
565 ½
-11 ¼
Mar KC Wheat
581
-12
Mar Min Wheat
643
-3 ½
Mar 09 Meal
301.8
-4.4
Mar 09 Bean Oil
31.53
-0.23

The Bottom Line;
1) Recent rains have helped Argentine crop, more rains expected this week and next
2) Conditions in Brazil continue to improve
3) China ends holiday season; the question is whether they continue to buy U.S. soybeans or if they switch to South America.            
 
All three grains closed lower once again. Heavy 1-3” rains in Argentina came as a surprise overnight and this drove prices lower after the open. There are another 3 rain events forecast by next Wednesday, with at least one calling for 1”+ widespread rains starting Thursday. If Argentina receives these rains, we should be done worrying about a drought. The market should continue to shift focus to demand and U.S. acres. New crop corn and soybeans were the weakest contract today and that may be evidence that the market is starting to focus on U.S. acres. We have had a large break, and we could be due for a short-covering rally. However, with the potential for 6 million+ more acres of corn and soybeans combined and a large amount of unsold grain, the market should continue to struggle on large rallies. It is easy to feel like you have “missed the boat”. Many producers never pull the trigger on sales because they feel like they are worried that prices will turn around and rally. There are plenty of strategies out there to at least protect you if prices do continue to fall…(and unfortunately I think they will).
                       
Go to www.ehedger.com for a free two-week trial that includes our hedging recommendations, trades of the day, market recaps or to simply open an account.
 
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. The market information contained in this message has been obtained from sources believed to be reliable, but is not guaranteed as to its accuracy or completeness. Market information may not be consistent with current or future market positions of E Hedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold E Hedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.
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