EHedger Afternoon Grain Commentary 8-15-2011
Aug 15, 2011
It’s Monday and the markets are starting off the week stronger. December corn finished 5 ½ cents higher at $7.20, November soybeans 16 ½ cents higher at $13.51 ¼, and December wheat 9 ¼ cents higher at $7.41 ½.
Soybeans led the way higher this morning after Nopa Crush came in better than estimates at 122,952. Soybeans have been lagging behind corn over the last couple of months on corn supply fears. We can see this in the latest COT report with one of the largest ever drops in net long soybean positions by managed money (see chart below)!
Weather is going to be a determining factor throughout the rest of August. If we don’t see adequate rainfall coverage we could see the beans/corn ratio come back some. If weather remains favorable for soybeans we could see another price break. The latest crop progress report shows no major changes in crop ratings for corn and soybeans. Here is how they break down:
Corn August 14th 5 year average
Doughing: 52% 58%
Dented: 17% 21%
Corn’s crop rating was left unchanged in the good-excellent category at 60%.
Soybeans August 14th 5 year average
Blooming: 94% 94%
Setting Pods: 70% 78%
Soybean’s crop rating was left unchanged in the good-excellent category at 61%.
The crop conditions report was neutral-to-bearish and may be slightly lower on tonight’s grain open. The market is still in an unknown zone after pricing in last week’s USDA report. We managed to take out the contract highs today in corn, but to continue making a significant rally we will likely need to see further yield reductions. We like staying in sustainable hedges and periodically checking AMMO to make sure you are well protected.
Please call your broker if you have any questions.
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