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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 7/29/10

Jul 29, 2010
 

It was another positive day in all three grain markets as corn, wheat, and beans all finished higher. December corn settled 3 cents higher at $3.93 ¾. November beans finished the day 10 cents higher at $9.88. September Chicago wheat settled for the day 12 cents higher at $6.27 ½. This morning the USDA released their export sales numbers with corn coming back in-line with estimates at 960,000mt between new and old crop. Export sales for beans came back very solid at 1,400,000mt between old and new crop, this was above the top end of the estimates. Finally, wheat export sales were very strong coming back at 919,000mt which was well above the top end of the estimates.  Mid-day weather still indicates positive growing conditions should dominate the majority of the corn-belt for the next 7-10 days.

With the exception of some drowned out areas the corn crop still appears to be off to a strong start this season. As we continue to progress through the summer without any major weather problems it wouldn't be out of the realm of possibility to see above trend line yields. From a producer's prospective, famers have had the opportunity to sell these levels so it may take a continued rally to entice more famers to sell corn. With the crop insurance levels scheduled to be set between August 15th and September 15th aggressive marketing strategies should be looked at in order to secure profitable levels in all three grains. Please give us a call to be sure that every marketing opportunity for your farm operation is being taken advantage of. We did get another ten percent of 2010-2011 corn sold at $4.50 basis the July 2012 futures. If you were unable to place this order please get in touch with your broker to discuss this strategy.

Wheat continues to be a great unknown. It appears to us that the damage that has been done is done and we will just have to wait and see what the actual harvest numbers come back at. The market is trying to figure out just how much damage has been done and continued volatility should be expected. The best advice that we have been issuing to our producers has been to sell deferred futures and store the wheat. With the nearby futures gaining 50 cents on the deferred contracts we feel that if the basis is favorable and storage space needs to be made available for corn or beans making cash sales and getting out of these positions is a good move. As is always the case please get in touch with your broker to discuss your individual operation to be sure the best strategy is put into place.

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Like corn beans continue to rally. We still feel that the bean crop is in good shape and barring any August weather should produce strong yields throughout the United States. With the funds adding to their long positions in both corn and beans coupled with a dollar that continues to make new lows it has made beans reach levels that are profitable for producers to sell. For those producers that need to get caught up on sales having resting orders in above the markets is never a bad idea.  Please give us a call if you have any questions about strategies to take advantage of these bean price levels.

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COMMENTS (1 Comments)

Anonymous
Market bearish propaganda stating 50% stocks to use ratio in wheat, highest level since 1987-88. Bullish propaganda stating lowest stocks to use ratio in 22 years. If this was 1988 perhaps prices are a little high but in 2010 were reaching break even prices. Nobody cash flowed spring wheat this spring according to ag studies but has become a rotational crop.
10:56 PM Jul 30th
 
 
 
 
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