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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.

Closing Grain Commentary 6/14/10

Jun 14, 2010

A strong day for the grains as corn, wheat, and soybeans all finished higher.  Much of this strength is spill-over buying from the Canadian markets. News that the Canadian Wheat Board said they could see total acreage planted down by as much as 8 - 12 ½ million acres.  This is especially bullish for Spring Wheat, Canola, and Oats.  We have certainly seen this in the market over the last couple of trading sessions.  Oats were limit up today and Minneapolis Spring wheat was up 21 1/2 on the close. This helped corn which started off the day stronger and finished towards the highs of the day with December finishing up 4 cents. The outside markets were also bullish for grains today with the sharply weaker US Dollar and stronger Crude Oil. A sale of 120,000 MT of 2009-2010 corn to China was announced by the USDA this morning. Export inspections came in at 37,075,000 bushels for corn which was right in line with trade estimates.  Crop ratings for corn were up to 77% good/excellent gaining 1 point in the excellent category.  Weather still looks good for most of the corn-belt with a drier forecast in the works for the later part of the week and adequate soil moisture levels.  We will continue to monitor daily forecast changes over the next couple of weeks.

For soybean news; Nopa crush estimates were disappointing at 127.8 Mil Bu when the estimate was at 130.2 Mil Bu.  The weekly export inspections were in line with expectations.  Crop progress shows soybeans 91% planted which was right around what the market was expecting. Crop conditions were rated 73% good/excellent which was slightly below expectations but not by much. We could see some continued buying from the outside markets but we still would use these rallies for those who need to catch up on sales.  We still feel that with a large South American crop coming online our export business will likely continue to decrease.  Having your soybean orders in above the market will be a good idea to capture bounces like the ones we have seen the last couple of trading sessions.

Wheat has gained back much of what it lost over the past two weeks in just two days. This market had been oversold compared to corn/beans.  The Canadian report could be what traders need to see to start covering some of the massive spec shorts in the wheat market.  We could see further short-covering from here which could give us the strength to make more sales if you are still under-hedged.  For producers that are able to store wheat there are still strategies to sell deferred futures and capture the carry that remains in the market.  If you are not caught up to our recommended levels of protection for corn/beans/wheat, please call you broker to discuss your hedging opportunities going forward.

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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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