EHedger Afternoon Grain Commentary 7-14-2011
Jul 14, 2011
To start the day grains were called higher but corn quickly turned lower. Part of the selloff can be attributed to Fed Chairman Bernanke’s comments about NOT planning a QE3 at this time which helped send crude oil and equities sharply lower. December corn finished 1 ¼ cents lower at $6.78 ½, November soybeans up 4 ¼ at $13.84, and December wheat down 4 ¾ at $7.38.
Where is the market headed in the next couple of weeks? This still highly depends on how the weather plays out. Right now there are conflicting weather models, but it is suggested that the ridge will start breaking up next Saturday. From Saturday into the 11-16 day forecast there is a potential for Northwesterly winds coming in. The question also is do we get up and stay into the 100 degree temps next week or are we really looking at low 90’s? This can obviously can vary quite a bit when it is all said and done so we like buying short term options (August corn calls) to help mitigate some of the upside risk for this timeframe.
Our thoughts on corn demand for ethanol have revolved around the weekly numbers not matching up with the monthly supply and demand numbers. The weekly numbers have been running behind pace and we feel this is part of the reason the quarterly stocks numbers were so far off from market estimates. The big question has revolved around the conversion rate the USDA is using. I have included a link to an AgWeb article by Darrel Good because I feel it is a good article and our thoughts are much in line with his on the issue.
Now is a good time to double check your AMMO to make sure you are covered. Please call your broker if you would like to go over this.
Have a great rest of the week!
For a free trial of EHedger services including the morning automated phone call, daily afternoon market commentary, and/or a free consultation, please contact EHedger at 866-433-4371. You can also visit us at www.EHedger.com.
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. 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 EHedger LLC, its affiliates, officers, directors, employees, or agents.