EHedger Report

EHedger Afternoon Grain Commentary 10-6-2011

Corn and beans were trading higher for most of the day before finishing unchanged on the close.  Outside markets were supportive with the Dow Jones up over 175 points and crude oil $3 higher.  Despite this rallies have continued to be met with more sell pressure.

Export sales this morning were better than expected for corn and allowed for a quick rally on the open.  Beans and wheat weekly export sales were as expected. 

                                          Estimated Range                                              Actual

Soybeans                           550,000 MTs – 850,000 MTs                         741,800 MTs

Corn                                600,000 MTs – 1,300,000 MTs                      1,291,300 MTs

Wheat                               300,000 MTs – 650,000 MTs                         431,200 MTs

There was not a whole lot of fresh news today besides sales.  Obviously there are still plenty of traders waiting to sell rallies in this market. For grains to turn around and go higher again we may need to see more fundamental changes like even lower yield estimates from the USDA or a change in demand.  Just in case the report is bullish we have been buying back hedges using option strategies.  Even though we have already made a sharp move lower in grains it doesn’t mean that the weakness is necessarily over.  We still have a large number of spec longs in corn and soybeans that can be liquidated and the outside markets have been extremely volatile and weak these past few months.  I would only recommend buying back hedges with "defined risk" option strategies for those who are well sold in this market.  If you need more downside protection, please call in to discuss current strategies.

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