Apr 23, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin


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 8-11-2011

Aug 11, 2011

The August USDA Supply and Demand report was out this morning and caused a sharp market rally in the grains.  December corn traded up the limit on the open but finished 25 ½ cents higher at $7.14.  December wheat finished 13 ¾ cents higher at $7.33, and November soybeans up 30 ¼ at $13.31 ¾. 

The report was bullish for corn and soybeans with large yield reductions between both crops.  The wheat numbers were left in-line with estimates.  I would say the biggest surprise was the large reduction in soybean yield and production.  Also, we think that there is more wheat that will be fed than what the report is indicating.

Now that the August S & D report is out, and the market is expecting lower production, where do we go from here?   It is a good chance we will see new crop corn try to take out the highs again in the short term.  Bull markets need to be fed and this was enough of a bullish report to get a limit move in corn.   We still have to get the rest of the way through August and there is a chance that the market will continue to call for more yield reductions.   At the same time, we could also see demand levels cut even from what we are estimating.  Even though they reduced their Ethanol number slightly, we still think they are overstating corn used for ethanol by up to 100 million bushels for 10-11 and potentially even more for the 11-12 demand estimates.  Right now the market is completely focused on supply concerns and the support has remained strong.

With the uncertainty in the outside markets we still have plenty of downside risk in the market.  With 300-500 point swings in the Dow every other day, we could see a large flight to quality and risk-off.  Just like 2008, this is a risk that should be considered when marketing.  If you would like to go over your position again in AMMO, please give your broker a call.

Chart 8.11.11

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.

Log In or Sign Up to comment

COMMENTS

No comments have been posted, be the first one to comment.
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions