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June 2011 Archive for 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.

EHedger Afternoon Commenatry 6-24-2011

Jun 24, 2011

 

Markets started off the day higher but finished sharply lower by the day session close. December corn was down 14 cents finishing at $6.32. November soybeans were down 8 cents at $13.09 ¼, and December wheat down 8 ¾ cents at $7.05 ½.
 
Grains have continued liquidating. Part of today’s weakness was stemming from sharply lower outside markets. The Dow Jones and S&P 500 were both sharply lower and this helped bring corn, beans, and wheat off their overnight highs.
 
Looking at the CFTC’s commitment of traders report we can see the liquidation quantified. Managed money reduced their net corn position by 60,000 contracts of corn and another 7,000 was liquidated by the index funds. Combined these two are still holding over 500,000 net long corn positions using futures and options, so you can imagine what the market would look like if more of these start to get liquidated. Managed money is now short Chicago wheat, but still holding long positions in Kansas City and Minneapolis wheat.
 
Here is a chart of what July corn did during this period of liquidation (red rectangle): 
ZCN11 ~ Daily 06242011 030413pm
With the June 30th report coming out next Thursday, we could likely see more choppy days ahead of us like today. Short term options may be of some use if you need to get some extra coverage for the report.

 

Best Regards,
 
EHedger
 
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.

EHedger Afternoon Commentary

Jun 23, 2011

Overall markets finished lower but were able to stage a large comeback from how far they had fallen early in the day session. December Corn finished 4 ¼ cents lower after being as much as 30 cents lower. November soybeans 15 cents lower after trading as much as 40 cents lower on the day. December wheat was only 5 ¼ lower.

 
For one the jobs data this morning sent the outside markets sharply lower. Crude oil was trading as much as $5 lower. The IEA countries announced that they would be releasing 60 million barrels of oil to supply the market after supply disruptions from Libya. 
 
We also had Census Crush, Weekly Export Sales, and Stats Canada out this morning, all between the 7:15 am overnight close and 9:30 am day session open. Stats Canada was really the biggest story of the 3 reports with acreage increases across all 4 major Canadian crops. The canola acreage is actually a record. So with this as well as technical selling, the markets were able to make some extraordinary moves today.
 
We also had November beans settle through a major technical level and could spur some more weakness in that contract. Even though corn staged a sharp rally, beans still couldn’t stay supported above this trendline. Look for some more potential downside risk as beans start to break out of their long term wedge.
ZSX11 ~ Daily 06232011 033208pm
 
With the June 30th report coming out next Thursday, we could likely see more choppy days ahead of us like today. Short term options may be of some use if you need to get some extra coverage for the report. If you have any questions, please give your broker a call.
 
Best Regards,
 
EHedger
 
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.

EHedger Afternoon Grain Letter

Jun 22, 2011

Grains were sharply lower today with corn finishing limit down. December corn finished 30 cents lower at $6.50 ¼, November soybeans down 17 ¼ cents lower at $13.32 ½, and December wheat down 34 ¾ cents lower at $7.19 ½.

Synthetically, July corn was down another 5+ cents and is likely going to open that much lower on the overnight session, especially with equities sharply lower again. Grains continue their downtrend on technical selling, weaker world wheat prices, and just a lack of fresh news to feed the bulls. Also today the ethanol numbers came in weak again. The USDA’s forecasted 5.00 billion corn bu used for ethanol production is looking a little heavy right now. We are still calling for that usage number to drop to potentially 4.9 billion at the current rate. This would essentially raise 2010 corn carryout and would be viewed as negative as the market is pricing this in.   
Also, I don’t want to sound like a broken record but with wheat prices getting heavy technical selling and worldwide prices falling, this will have a large affect on front month corn as they both compete for who can be the cheaper feed ingredient in a cattle market that has been liquidating numbers.
With the June 30th report coming out next Thursday, we could likely see more choppy days ahead of us like today. The funds are still loaded up with long positions in corn and soybeans. Managed money has reduced their long Chicago wheat positions substantially over the last couple of months, and with this recent action, I wouldn’t be surprised if they turn out to be net short on the next COT report, but we will have to wait for Friday to see that.
 
Best Regards,
 
EHedger
 
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.

EHedger Afternoon Commentary 6-21-11

Jun 21, 2011

Grains finished sharply higher with new crop corn leading the way. December corn finished 19 ¾ cents higher at $6.80 ¼, November soybeans finished 14 ¼ cents higher at $13.49 ¾, and December wheat finished 9 cents higher at $7.54 ¼.    

The July-December corn spread is back to levels not seen since before the October 2010 Supply and Demand Report. The spread is trading at 27 ¼ cents premium July over December when it was as high as $1.33 ½ premium in February.
 
Chart: July-Dec Corn Spread
 ZCN11   ZCZ11 ~ Daily 06212011 045819pm
 
Despite the bear spreading, December corn still gained heavily on the day. Part of the rally is just short covering after last week’s heavy break. The longer term forecast is calling for a ridge in the Corn Belt. We will update you with any developments to the forecast.
 
With the June 30th report coming out next Thursday, we could likely see more choppy days just like today. The funds are still loaded up with long positions in corn and soybeans. Managed money has reduced their long Chicago wheat positions substantially over the last couple of months. 
 
Please call an EHedger Broker if you have any questions.
 
Best Regards,
 
EHedger
 
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.

EHedger Afternoon Grain Commentary

Jun 20, 2011

 

Grains were mixed today with wheat continuing its selloff. July corn finished ¼ cent higher at $7.00 ½, July soybeans up 2 ¾ cents at $13.35 ¾, and July wheat down 13 cents at $6.59 ¼.   
Today’s trading action was much like last weeks. Grains have been liquidating, especially wheat. Corn seems to want to stay supported at $7, but every day that wheat is sharply lower there is a prospect that it will take feed demand away from corn. The Corn-Wheat spread is back to 40 cents. The variable storage rate has put a large premium in the deferred wheat contracts and is also part of the fundamental reason July wheat has been allowed to get such a discount to July corn. If wheat continues its downtrend, it could pull corn down with it. July wheat still remains below the huge technical level (see chart).
 Wheat Chart
Crop progress shows corn at 97% emerged compared to 99 percent on average. We gained another percent in the good/excellent category putting corn at 70%. Soybeans jumped to 94% planted, which is above the 5-year average pace of 93%. Soybean conditions also gained a percentage point in the good to excellent now to 68%. Winter wheat is now 31% harvested compared to the 5-year average of 22%.
Next week we have the June 30th report. We have our monthly webinar scheduled for tomorrow morning at 9 am. We will give a more in depth analysis of current market fundamentals. We will also be displaying the latest 2012 hedge recommendations in a more detailed explanation. Have a great week!
Best Regards,
 
EHedger
 
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.

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