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August 2012 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 Grain Commentary 8/31/12

Aug 31, 2012

Grains had another day of long liquidation ahead of their three day weekend.  December corn settled 8 ¾ cents lower at $7.99 ¾, November soybeans 7 cents lower at $17.56 ½, and December wheat 13 ½ cents lower at $8.89 ½.

 

The fact that the Russian Ag meeting did not lead to an export ban resulted in downward pressure in the front month wheat contracts.  Corn and soybeans also found resistance as corn traded right alongside with wheat (see chart).

 

Chart: December Wheat with a December Corn Overlay – 20 minute barsDecember Wheat December Corn

 

The main news event was Bernanke’s Jackson Hole speech where he hinted to more stimulus if needed. Though he did specifically say the FED would initiate a third round of Quantitative Easing, he heavily defended the programs and "wouldn’t rule out further asset purchases".  This was significant enough for the market to send the dollar down to 3 month lows.  Despite the weak dollar, strong crude oil, and strong gold, grains did not seem to be affected.

 

Technically December corn’s sell signal from the exponential oscillator remains intact.  If we break through the lower end of the range we are currently in, we could see further technical setbacks.

 

Chart: December CornDecember Corn

 

Soybeans have not shown much demand rationing and could still be set for a move higher.  We are however finally seeing the March contract start to gain some ground back to the November and an overall trend of declining open interest (all combined contract months).  Today was significant given it was the first day we settled below the 50 day moving average since June 6th.  Next target: 54 cents over.

 

Chart: November – March Soybean SpreadSoybean Spread

 

The Commitment of Traders report showed a significant reduction in corn and bean longs by the managed money.  They are still holding a massive amount of longs but any sign of them getting out may also be something to trigger more market weakness.

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/29/12

Aug 29, 2012

Grains had double digit gains across the board today on concerns of lower world wheat production.  September wheat was the upside leader gaining 30 ¾ cents to close at $8.85 ½.  December corn closed 18 cents higher at $8.13 ½ and November soybeans 30 ¾ cents higher at $17.53.

The trade talk revolved around the Russian grain meeting coming up this Friday and concerns over a potential export ban implementation.  The fact that their yields are coming in lower than last year and the export sales pace has been strong has led the market to believe they may be a bit oversold.  The market is also looking at recently strong world wheat demand and dry conditions in Australia as a potential for another bull-run for wheat.  The strength in wheat translated into strength for corn and soybeans as we head towards the long weekend.

 

The weekly EIA numbers showed lower ethanol production and unchanged stocks.  They also had a bearish crude oil stocks number which put crude oil back below $95 per barrel.

 

Tomorrow’s weekly export sales report is expected to show 250,000 – 450,000 MTs of corn, 600,000 – 800,000 MTs of soybeans, and 450,000 – 600,000 MTs of wheat.  We will release the sales in the morning letter.

 

Soybeans continue to look strong until we see a significant change in demand.  Upside resistance is seen in November at $17.98 and downside support at $16.65.  The all-time contract high from Monday is $17.60 ½ for November, look for stops above this level.

 

Chart: November SoybeansNovember Soybeans

 

December corn found support at the low end of the channel today. Near term support is seen at $7.97 with upside resistance at $8.47.  It looks as though we are stuck in range bound territory for now.

 

Chart: December CornDecember Corn

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/28/12

Aug 28, 2012

It was a mixed day in the grain markets with heavy bear spreading.  December corn closed 5 ¼ cents lower at $7.95 ½, December wheat down 5 ¾ at $8.75 ½, and November soybeans up 3 ½ cents at $17.22 ¼.

 

The morning session started with a sale announcement by the USDA for 110,000 MTs of US soybeans to China for 12/13 delivery.  Typically any sign of additional demand during all-time record high prices would trigger more support but the pre-pit open was weak through the 8:30 am time frame.  The November contract traded all the way down to $17.01 before finding support.

 

During the trading session, trading executives said that a branch of Taiwan’s Breakfast Soybean Procurement Association purchased 178,000 MTs of new crop soybeans for next year’s delivery.  The amount from the US totaled 58,000 MTs for delivery in November while the other 120,000 was split between March and July in Brazil.  This announcement may have been the reason we saw that extra strength come back into the bean market during the day session hours.

 

The University of Missouri put out a study by one of its think tank groups about ethanol production falling next year.  They are estimating ethanol output to fall by 10% as the rising prices cut export demand by 50%.  They only expect the domestic consumption to drop by 2%.

 

Friday’s Commitment of Traders report didn’t show any signs of the funds slowing down their purchasing.  The ‘managed money’ is now net long 342,893 contracts of corn which is an increase of 39,715.  They are also net long 252,388 contracts of soybeans, an increase of 21,845!  At this point the information is over a week old given the lag in the reporting.  We will have to see if they have continued this trend on Friday’s report.

 

Yesterday we had a bearish crossover on the exponential oscillator for December corn.  Today’s selloff keeps that sell signal intact (see chart).  The 50 day simple moving average is at $7.46 ½.  If December corn is able to settle below $7.85, I would use the 50 day SMA as the next downside target. 

 

Chart: December CornDecember Corn

 

Soybeans continue to look strong until we see a significant change in demand.  Upside resistance is seen in November at $17.92 and downside support at $16.60.

 

Chart: November SoybeansNovember Soybeans

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/27/12

Aug 27, 2012

Corn, wheat, and soybeans started off strong on Sunday night’s session but ended the trading day weak.  December corn closed 7 ¾ cents lower at $8.00 ¾, November soybeans down 12 ¾ at $17.18 ¾, and December wheat down 7 ¼ at $8.81 ¼.

The export inspections fell short of expectations this morning and were a major factor in today’s weakness.  Soybean inspections were 17.40 million bushels compared to market expectations at 23.00 million.  Wheat was 18.84 million bushels compared to 21.0 expected, and corn was 14.45 million, compared to 22.5 expected.  The market can be extra sensitive to any changes in demand on a year like this.  We will have to continue to watch for morning sale announcements and Thursday’s export sales reports.

 

Weekly Crop progress shows corn at 76% dented (5-year average at 46%) and 26% mature (5-year average at 8%).  Corn is now 6% harvested and crop conditions had a 1% drop in the good to excellent – now 22%.  Soybeans also dropped a point in the good-excellent rating to 30% and 8% of the crop is dropping leaves.

 

Friday’s Commitment of Traders report didn’t show any signs of the funds slowing down their purchasing.  The ‘managed money’ is now net long 342,893 contracts of corn which is an increase of 39,715.  They are also net long 252,388 contracts of soybeans, an increase of 21,845!  Clearly the funds have continued to press their bets.

 

The production estimates from the Pro Farmer crop tour were less than anticipated and generally viewed as "bullish". At the same time, we have Informa raising their acreage estimate (due to FSA numbers) and have corn and bean yield pegged above the USDA’s current estimates.  Even though Informa has raised their production estimates they have pegged demand much higher than the USDA bringing their ending carryout estimate lower.

 

Technically December corn had a bearish crossover in the exponential oscillator (see chart).  This can be used to help spot a change of trend and given that we are entering harvest it is something to note in case of further weakness.

 

Chart: December CornDecember Corn

 

 

Soybeans continue to look strong until we see a significant change in demand.  Upside resistance is seen in November at $17.87 and downside support at $16.46.

 

Chart: November SoybeansNovember Soybeans

 

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/24/12

Aug 24, 2012

Corn and wheat closed lower on Friday’s trading session while soybeans had double digit gains.  For the week, December corn finished up 1 ¼ cents, November soybeans up 85 ¾ cents, and December wheat down 6 cents.

 

The extra soybean strength is a combination of recent positive crush numbers, strong export demand two weeks in a row, and poor pod counts.  With Pro Farmer estimating a national average soybean yield at 34.8 bpa, we can’t afford to have strong demand.  We see the potential for soybeans to continue its upward move to ration more demand.

 

Pro Farmer also lowered its estimate for the national corn yield to 120.25 bpa.  This is lower than the 123.4 which the USDA has used for their most recent estimate on the August Supply and Demand report.  At 120.25 we are a little more neutral on our outlook for corn.  We have started to ration demand and can’t afford a large break and see a jump in demand.  At the same time we have started to see exports slow and feed demand rationing.  A range between $7.60 and $8.60 is where we expect to stay for the short-medium turn.

 

The CFTC’s Commitment of Traders report showed another massive increase to the long positions held by managed money in corn and soybeans (*using combined futures and options from Wednesday the 15th through Tuesday the 21st).  The ‘managed money’ is now net long 342,893 contracts of corn which is an increase of 39,715.  They are also net long 252,388 contracts of soybeans, an increase of 21,845!  Clearly the funds continue to press their bets.

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/22/12

Aug 22, 2012

Grains closed the trading session slightly lower.  November beans finished 4 ¾ cents lower at $17.27 ¾, December corn 4 cents lower at $8.34 ¾, and December wheat down 5 cents at $9.17.

The Pro Farmer crop tour still seems to be the main focus of the market.  Yesterday’s results revealed a slightly better pod count and corn yield estimate than expected in Indiana.  We still have the rest of the week to get through so we will want to monitor any news coming out of the field for short term direction.

 

STATSCAN released their survey results this morning.  The average analyst estimate was calling for 16.40 MMTs of canola production but instead came in at 15.41 MMTs.  This triggered a strong rally in the canola futures as well as soybean oil.  Canada’s wheat production was estimated at 27.01 MMTs which is in line with market expectations.

 

The EIA Ethanol Production report showed another increase in production and an unchanged supply.  This was not far off from expectations and didn’t trigger a major market response.  The FOMC Minutes caused a sharp decline in the US Dollar Index providing some underlying support to commodities in general.  In their release they hinted to another round of quantitative easing (QE3) "soon" which is seen by many in the industry as inflationary.

 

Tomorrow morning we will have the Weekly Export Sales data at 7:30 am CST. The average guess for corn is 200,000 – 500,000 MTs, for beans 400,000 – 800,000 MTs, and for wheat 300,000 – 400,000 MTs.  With the current USDA estimates for soybean production we obviously need to see a slowdown in export bookings to show demand rationing. Crush margins have been good and last week we saw another large sale number, which is partly why the price of November soybeans has rallied 93 ¼ cents in the past 7 days.

 

Chart: November SoybeansNovember Soybeans

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

 

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/20/12

Aug 20, 2012

Bullish news coming out of the fields along the ProFarmer crop tour kept grains sharply higher today.  December corn closed 16 ½ cents higher at $8.23 ¾, November soybeans 37 ¾ cents higher at $16.83 ½, and December wheat 8 ¼ cents higher at $9.02 ¾.  We are about 25 cents below the contract high in December corn and only 8 cents below the contract/all-time high for November soybeans.  We broke through trendline resistance in soybeans and a move above the contract highs may trigger more buy-stops.  November soybeans are still holding an extraordinarily steep premium through the spring contracts.

 

Yield reports from South Dakota have been very poor so far.  Many of the fields in that region had already been chopped for silage and the fields still standing were well below last year and the averages.  Obviously the market has been expecting poor yields but today’s numbers may have been a little worse than they were expecting given the market reaction.  We also started the day with a corn sale announcement for 121,000 of new crop to Mexico (99,000 for 2012-13 and 22,000 for 13-14).

 

Crop progress shows no change to the corn condition but a 1 point improvement in the good-excellent category for soybeans.  Corn is now 17% mature and 4% harvested, both of these numbers are well above their 5 year averages.  Overall the report didn’t show any surprises.

 

Due to some technical difficulties, the export inspections were not released at their regularly scheduled time this morning.  Instead they released the numbers immediately following the day session close at 2pm CST.  Corn inspections were 21.515 million bushels which was about 2 million above expectations.  Soybeans were well above expectations at 21.42 million and wheat was at 23.42 million.  These numbers could lead to a slightly higher open on tonight’s trading session.

 

The CFTC’s Commitment of Traders report showed another increase to the already massive long positions the funds are holding in corn, wheat, and soybeans.  Using futures and options combined, the "managed money" alone is long 1.516 billion bushels of corn, 1.1577 billion bushels of soybeans, and 385.520 million bushels of Chicago wheat.  Obviously these huge positions have helped push grains to the current levels.  How much more will they add to these positions and how long will they stay in them are the questions to ask.

 

While corn is in a supply market we believe soybeans are in a demand market.  Crush continues to outpace estimates.  Exports have been strong.  At the same time the recent rains have the market wondering if bean yields have improved.  In our opinion once we get past the supply question soybeans will have a bigger story than corn.

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.

 

Chart: November SoybeansNovember Soybeans

 

Chart: December CornDecember Corn

 

Chart: December WheatDecember Wheat

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/17/12

Aug 17, 2012

The intra-commodity spreading pushed the soybean/corn ratio to new highs for the week.  November soybeans closed 20 ½ cents higher at $16.45 ¾. December wheat closed 12 ¾ cents higher while December corn closed ¼ cent lower.

 

Today’s Cattle on Feed report showed slightly lower placements than what the market was calling for.  The high price of feed is clearly affecting the feed demand as the latest WASDE report shows the "feed and residual" estimate dropping by 725 million bushels of corn.

 

The CFTC’s Commitment of Traders report showed another increase to the already massive long positions the funds are holding in corn, wheat, and soybeans.  Using futures and options combined, the "managed money" alone is long 1.516 billion bushels of corn, 1.1577 billion bushels of soybeans, and 385.520 million bushels of Chicago wheat.  Obviously these huge positions have helped push us to these lofty levels.  How much more will they add to these positions and how long will they stay with them are the questions to ask.

 

The Weekly Export Sales Report showed strong soybean sales but corn and wheat both fell below the estimated range.  Corn above $8 has obviously taken a toll on the export pace which has restricted its upside.  At the same time the price can’t afford to fall very far and create a bunch of demand until we know more about the crop size.  For this reason we think we are stuck in a holding pattern between $7.50 and $8.50 until we get further into harvest.

 

While corn is in a supply market we believe soybeans are in a demand market.  Crush continues to outpace estimates.  Exports have been strong.  At the same time the recent rains have the market wondering if bean yields have improved.  In our opinion once we get past the supply question soybeans will have a bigger story than corn.

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com. Thanks and have a great weekend!!!

 

Chart: November Soybeans 2012/December Corn 2012 RatioSoybean Corn Spread

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/16/12

Aug 16, 2012

Grains finished mixed on Thursday’s afternoon close.  December wheat held the most support closing 15 ½ cents higher at $8.81 ¾.  December corn closed 3 ½ cents higher at $8.07 ½ while November soybeans settled 9 ¼ cents lower at $16.25 ¼.

 

The Weekly Export Sales Report showed strong soybean sales but corn and wheat both fell below the estimated range.  Corn above $8 has obviously taken a toll on the export pace which has restricted its upside.  At the same time the price can’t afford to fall very far and create a bunch of demand until we know more about the crop size.  For this reason we think we are stuck in a holding pattern between $7.50 and $8.50 until we get further into harvest.

 

While corn is in a supply market we believe soybeans are in a demand market.  Crush continues to outpace estimates.  Exports have been strong.  At the same time the recent rains have the market wondering if bean yields have improved.  In our opinion once we get past the supply question soybeans will have a bigger story than corn.

 

Friday afternoon we will have the CFTC’s Commitment of Traders report as well as Cattle on Feed.  The market is estimating On-Feed to be 100.7, Placed at 91.4, and Marketed at 101.6. 

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.  Thanks and have a great rest of the week!

 

Chart: December CornDecember Corn

 

Chart: November SoybeansNovember Soybeans

 

Chart: November Soybeans 2013/December Corn 2013 RatioNovember Soybeans 2013/December Corn 2013 Ratio

 (Supports corn planting again but can the ratio stay this low for very long?)

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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 8/15/12

Aug 15, 2012

Grains closed higher with the nearby contracts leading the way.  December corn settled 15 cents higher at $8.04, November soybeans 36 ½ cents higher at $16.34 ½, and December wheat 8 cents higher at $8.66 ¼.  The weekly EIA numbers showed a slight increase in ethanol production with another drawdown in ethanol stocks.  The crude oil stocks were also down more than expected which gave strength to the crude market.  Overall the report was generally supportive for corn.

 

November soybeans were strong for the majority of the day as they stay within their wedge formation.  The market is expecting large sales on tomorrow’s report and may be the reason for the additional support today.

 

Chart: November SoybeansNov Soybean

 

Wheat was unable to capture the same momentum corn and soybeans had but we did see some heavy bull spreading in the Dec-July13 contracts.  July wheat is now only at a 33 ¼ cent premium to July corn.  If this spread continues to narrow, we could see the same situation we were in last year, an increased switch to feed wheat around the world.

 

Tomorrow we will have the Weekly Export Sales Report at 7:30 am.  The market is calling for 400,000 – 600,000 MTs of corn, 700,000 – 1,000,000 MTs of soybeans, and 400,000 – 600,000 MTs of wheat.

 

Friday after the market closes we will see the Cattle on Feed report.  The market is estimating On-Feed to be 100.7, Placed at 91.4, and Marketed at 101.6. 

 

Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  To learn more please visit www.ammoag.com.  Thanks and have a great rest of the week!

 

www.ehedger.com/signup 

 

 

Best Regards, 

EHedger 

866-433-4371

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 8/14/12

Aug 14, 2012

It was a choppy, two sided market for corn and soybeans while wheat had double digit losses again.  NOPA Crush came in at 137.38 million bushels in July which surpassed the average estimate by 7 million.  Despite this favorable news soybeans remained heavy which may have been from the forecasted rains and a slight increase in the crop conditions.  The ethanol mandate is still under the spotlight which is keeping corn relatively stable for now.  The decline in the gulf basis as exports have slowed has also been a factor holding corn back.  The wheat market had the largest setback today.  Egypt reportedly bought 60,000 MTs of wheat from Russia and another 60,000 MTs from Ukraine both for September delivery.  The discount to the US markets may have been cause for today’s wheat setbacks.

 

 

USDA REPORT:

The USDA lowered the corn yield to 123.4 versus their July estimate of 146. For soybeans the yield was reduced to 36.1 down from the July estimate of 40.5. Corn harvested acres was also lowered to 87.361 giving us a total production estimate of 10.779 billion bushels. For soybeans, harvested acres were lowered to 74.635 giving us a total production estimate of 2.692 billion bushels. There were no major surprises in the wheat numbers as world carryover was in line with estimates at 177.17 million tons. US wheat production was also in-line with estimates. The thought now is that we turn to the European wheat crop as weather has troubled the Russian crop. The Russian wheat export numbers were lowered by 4 million tons while production was cut to 43 million tons from 49 million tons in the July report.

 

There were some interesting world numbers to discuss. Chinese corn production was raised to 200 million tons up 5 million tons from the July estimate as good rains have occurred over the last month through key growing areas of China. As a result of better than expected production the Chinese corn imports were lowered 3 million tons to 2 million tons. Both Argentine and Brazilian corn production was raised along with exports. All said, the world numbers certainly point to helping ease the tight balance sheet that is occurring in the USA.

 

The soybean world production numbers were raised by 3 million tons in Brazil causing exports to be increased by 2 ½ million tons. Chinese soybean imports were lowered 1 ½ million tons.

 

Where do we go from here? The early reaction from the market was to take corn to new all-time highs of $8.49 before settling back to trade lower just minutes after the report. It hasn't been a secret that the weather has hurt the corn and soybean crop. The last week and a half we have received timely rains throughout the corn-belt and this should be helping the soybean crop. It seems as though the market may have been estimating yields below current USDA projections. What will continue to drive this market? In the next couple of weeks more and more corn will begin to be harvested and we will start to dissect the actual yields from across the country. The market will be very sensitive to yield reports as we go forward. The midday forecast did not call for any major changes.  Favorable rains are expected Wednesday/Thursday for the western belt and Thursday/Friday in the eastern belt. Next week another system is expected to come in Tuesday-Thursday.

 

This Thursday morning we can expect the weekly export sales at 7:30 am, Friday there will be a cattle-on-feed report.  Please contact EHedger at 866-433-4371 if you would like to try our proprietary farm management software called AMMO.  Thanks and have a great week!

 

www.ehedger.com/signup 

 

Best Regards, 

EHedger 

866-433-4371

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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