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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 Grain Commentary 2-6-2012

Feb 06, 2012

Wheat ended the day strong while corn and beans were near unchanged. March corn settled down a ¼ cent at $6.44 ¼, March soybeans up ½ cent at $12.33, and March wheat was up 7 ¾ cents at $6.68 ½.

Weekly export inspections were above expectations for corn and soybeans yet below expectations for wheat. 

Weekly Export Inspections:

Corn                   39.389 mln bu (35.0 mln expected)

Soybeans            37.292 mln bu (37.0 mln expected)

Wheat                 14.505 mln bu (18.5 mln expected)

Overall outside markets did not give much direction for the day.  We have the report out on Thursday, February 9th.  We don’t expect to see much major changes from the last Supply and Demand report in January.  The one area that they may change is the South American production estimates.  We still think that Argentine corn production is going to be in the 21 – 22 MMTs range.

Over the past few EHedger letters we have started to include our production estimates. With our expectations of 95 million corn acres, and 75 million bean acres, there is a great chance that we end up with a much larger carryout at the end of next year than where we stand today (see included chart).  We have to keep in mind that the 7 year average price for front month corn is still approx $4.20 and $9.79 for soybeans.  Although we still have to get through the growing year without significant weather problems, there is plenty of leeway given the amount of potential acres and where trendline yields stand.

Now that we are starting to set the average Feb price for the spring crop insurance levels, we are getting a clearer picture everyday of what to expect for a revenue guarantee.  Once that level is set we can make a more informed decision of how much downside protection we need to keep on for the year using futures, options, and cash sales for each individual. 

For our readers in the Northern IL areas, we will be speaking next Monday, February 13th at the 2nd Annual Agricultural Outlook Meeting.  The meeting is sponsored by EHedger, First Midwest Bank, and Beck’s Hybrids.  Gary Schnitkey from the University of Illinois will be speaking as well as other industry professionals including Dan Dempsey from EHedger who will be discussing the brand new AMMO farm management software.  If you would like to attend, please RVSP before Friday February 10th by contacting Maggie Robisky at 815-941-3725 or by email at Maggie.robisky@firstmidwest.com .  You can also contact us for RSVP at 866-433-4371 or at info@ehedger.com .  Have a great week!

www.ammoag.com

 

 

Best Regards,

EHedger

866-433-4371


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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