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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 Afternoon Commenatry 6-24-2011

Jun 24, 2011

 

Markets started off the day higher but finished sharply lower by the day session close. December corn was down 14 cents finishing at $6.32. November soybeans were down 8 cents at $13.09 ¼, and December wheat down 8 ¾ cents at $7.05 ½.
 
Grains have continued liquidating. Part of today’s weakness was stemming from sharply lower outside markets. The Dow Jones and S&P 500 were both sharply lower and this helped bring corn, beans, and wheat off their overnight highs.
 
Looking at the CFTC’s commitment of traders report we can see the liquidation quantified. Managed money reduced their net corn position by 60,000 contracts of corn and another 7,000 was liquidated by the index funds. Combined these two are still holding over 500,000 net long corn positions using futures and options, so you can imagine what the market would look like if more of these start to get liquidated. Managed money is now short Chicago wheat, but still holding long positions in Kansas City and Minneapolis wheat.
 
Here is a chart of what July corn did during this period of liquidation (red rectangle): 
ZCN11 ~ Daily 06242011 030413pm
With the June 30th report coming out next Thursday, we could likely see more choppy days ahead of us like today. Short term options may be of some use if you need to get some extra coverage for the report.

 

Best Regards,
 
EHedger
 
For a free trial of EHedger services including the morning automated phone call, daily afternoon market commentary, and/or a free consultation, please contact EHedger at 866-433-4371. You can also visit us at 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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