Closing Grain Commentary 8/10/10
Aug 10, 2010
Grains fell sharply today after higher dollar trade and profit taking ahead of the report.
This morning we started the day weaker continued from the overnight trade and closed towards the lows of the day. There was more bear spreading in the wheat which suggests more profit taking ahead of the USDA report. The estimates for Thursday’s report are located below.
This morning the USDA announced the sales of another 400,000 tonnes of US soybeans to China, 180,000 to an unknown destination, and 100,000 to Egypt. Egypt also bought 120,000 tonnes of US Wheat. Even with this in-flow of demand November Beans managed to finish 13 cents lower on the day. This is likely due to the fact there are still massive longs in the market, and we are seeing position squaring/profit taking before Thursday morning. We could see more of this tomorrow.
The weather forecast has improved as well. Many of the dry areas are going to get much needed rain relief and the wet areas could see some drying. We are getting closer to harvest and crop conditions are still showing high good-to-excellent ratings which many analysts were calling for more deterioration.
The main thing we like to stress is not to lift any hedges at this point. If you need margin room we can talk about moving any marginal positions over to the cash market. Capital preservation and staying power for hedges are very important. **Check the latest corn recommendation**
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 price levels.
Reports: Chinese Stocks Report (expected to be released anywhere from now until the middle of August) , USDA Supply and Demand along with Production (August 12th.)
Get More From EHedger.
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
Get Organized. Get Ahead. Get EHedger
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.