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EHedger Report

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.

Short Covering Helps Grains Rebound

Feb 05, 2009
SETTLEMENTS
             
Mar 09 Corn
371 ¼
+13
May 09 Corn
381 ½
+12 ¾
Mar 09 Beans
980
+30 ½
May 09 Beans
983 ¼
+29 ½
Mar 09 Wheat
561 ¾
+19 ½
May 09 Wheat
574 ¾
+19 ½
Mar KC Wheat
590
+20
Mar Min Wheat
654 ½
+17 ½
Mar 09 Meal
308.0
+7.5
Mar 09 Bean Oil
33.05
+0.70

The Bottom Line:
1) This morning’s export sales were above expectations for corn, within the estimates for wheat, and a bit disappointing for beans.
2) Commodities in general found support during the session.
3) Argentina received some additional rains overnight.            
 
Corn, wheat, and beans all saw strong buying during the session. Overall, there was no major news to spark today’s rally. The strong corn sales may have added to the buying interest. However, beans and wheat lead the way and there was nothing impressive about their sales. Overall, it looked like people continue to want to buy the market and they are looking for any reason to do so. There were even stories out there that you need to buy corn because temps are going to get above 40 and the corn on the ground may rot (obviously not a legitimate reason to buy corn). Sure you can get your rallies, especially after big breaks like we just had. However, at this point there just does not appear to be a fundamental reason to start an up-trend from these levels. In addition, yes the producer does still have significant downside risk even after the recent break. The market is going to give rallies like we saw today and producers should make sure to use these rallies to catch up on their sales.
                                                                                                      
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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