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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.

EHedger Closing Grains Commentary 6/25/09

Jun 25, 2009
 
SETTLEMENTS 6/25
         
 
July 09 Corn
382 ½
- 4
Dec 09 Corn
401 ½
- 5 ¾
July 09 Beans
1196
+ 11
Nov 09 Beans
1002
- 6
July 09 Wheat
533
- 6 ¾
July 09 KC Wheat
592 ¼
- 5 ¼
July 09 Min Wheat
678 ½
- 14 ½
July 09 Meal
397.3
+ 4.8
July 09 Oil
36.54
+ 0.10
 
 
 
 
 
 
 
 
 
 
 
 
 







Highlights:
 
  • Grains, Oilseeds Close Mixed After Quiet Session
  • New Crop Corn Settles At Lowest Level Since April 27
  • Firmer Crude Oil Offers Little Support
  • USDA June 30 acreage report becoming main focus of corn & soy markets
 
The grains and oilseeds markets closed mixed, with old crop soybeans, soy meal and soy oil ending the session firmer while corn and wheat ended lower. Overall volumes were light throughout as traders appear content to count down the clock ahead of Tuesday’s USDA acreage update.
 
The US dollar weakened while crude oil rallied on the day, which normally would have provided a supportive backdrop to the grains and oilseed markets. However, only the soy complex responded positively, and even there only in the old crop contracts.
 
We are still concerned about the health of end users in the agricultural markets, especially in the animal sector where hog production margins continue to deteriorate and livestock profitability remains at risk. With that in mind, the recent price-break in corn will have been welcomed, but we are still awaiting a clear response on the demand side of the equation for signs that we’ve reached a more comfortable level for both buyers and sellers of that crop. It’s quite possible that strong buying may not surface until we’re back below $3.80 in new crop prices, so there’s still potential for more losses here. Further, the weather seems to be panning out favorably after our late start, so we need to start bracing for calls for record yields etc in a few weeks if we continue to get regular rains.
 
Given that potential for more weakness, we encourage producers to look to top up sales and hedges on any further price rallies that we may see in the days and weeks ahead. Next week’s report could provide a bullish surprise in the form of a large planted acreage projection, but we suggest using any resulting rallies as a chance to lock in further sales.
 
On the bean front, we think there’s potential for a more aggressive slide in new crop prices if next week’s acreage figures reveal a jump of more than 2 million acres from the March 31 projections. The beans have put on a hugely impressive price rally since early March, and those higher prices will certainly have purchased more acres than estimated in early Spring. We’re even hearing stories that some farmers who are set to harvest winter wheat are pondering double cropping some beans behind them just to see what return they’ll get if prices stay high. So, again, we are urging producers…
 
As always, please give us a call if you have any questions or for a consultation about your positioning heading into the June report and growing season.
 
Best regards,
 
EHedger
 
 
 
Go to http://www.ehedger.com/sign-up/ for a free two-week trial that includes our hedging recommendations, trades of the day, market recaps or to simply open an account.
 
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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