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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!
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