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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 8-22-2011

Aug 22, 2011

Grains were sharply higher today after the Midwest didn’t receive as much rain as expected over the weekend.  December corn finished 9 ¼ cents higher, December wheat 4 ¾ cents higher, and November soybeans 16 ¾ cents higher.

There are some big things going on this week that the market will be focusing on.  For one the Pro Farmer crop tour will be reporting yields all week.  Twitter was blowing up with condition reports all day, but the official Pro Farmer results will not be out until later in the day.  From the press releases the tone seems mixed with a lot of variability.  We also have the Jackson Hole summit where we can expect Fed Chairman Bernanke to speak about Fed policy.  Last year at this time he announced QE2 at the end of the week.  This year the market is speculating that he could announce a third round of quantitative easing during his speech.  We will have to wait to find out.

Weekly crop progress came in today at 3pm and is as follows:

Corn                                                August 22nd                         5 year average

Dough:                                                 73%                                        73%

Dented:                                                33%                                        37%

Good-excellent crop condition: 57% which is down 3% from last week and 13% from last year.

Soybeans                                         August 22nd                         5 year average

Blooming:                                            97%                                        97%

Setting Pods:                                       83%                                        88%

Good-excellent crop condition: 59% which is down 2% from last week and 5% from last year.

Overall the drop in the good-excellent categories can be seen as supportive for price action tonight.  We already made new contract highs today in Dec 11 and Dec 12 corn.  We also are seeing all time highs being made in other markets like gold.  With so much supply uncertainty this market seems to want to remain supported and we may see soybeans make the next move higher if we don’t see some adequate rains soon in the problem areas of the Midwest.

Buying soybean calls for upside potential is still a decent way to play the long side of the market.  Please call in if you have any questions.  Have a great week!

Chart 8.22.11

Best Regards,

EHedger

 

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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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