EHedger Afternoon Grain Commentary 9/7/12
Sep 07, 2012
It was another mixed day at the Chicago Board of Trade with wheat being the upside leader. December corn closed a penny higher at $7.99 ½, November soybeans 10 ½ cents lower at $17.36 ½, and December wheat up 13 ¼ cents at $9.05.
The Weekly Export Sales report was released this morning after being delayed a day due to the holiday. Corn sales were extremely dismal at only 25,000 MTs. Soybeans also came in below the estimated range at 526,000 MTs and wheat in-line at 554,000 MTs.
The highly anticipated Informa numbers were released shortly after 10:30 am this morning as two sets of estimates. They expect the September USDA corn yield to be 119.8 bpa with 10.310 billion bushels total production. Although their guess is below the current USDA estimate for September, they are predicting 126.5 bpa yield and 11.030 for a final end-of-year total. For beans they are projecting 35.4 bpa yield and 2.639 total production for September and a final production of 2.690 billion.
November soybeans rallied sharply immediately following the Informa release.
Corn stayed within a relatively tight trading range. I have discussed this range in the past few market letters and I don’t expect this to make any major changes prior to Wednesday’s WASDE report.
The average market guesses for Wednesday are rather mixed. They expect old crop carryout to fall between 0.971-1.176 billion bu for corn and 0.125-0.145 billion for soybeans. They expect next year’s carryout to fall between 0.458-0.658 billion bu for corn, 0.087-0.128 for soybeans. Source: Reuter’s Poll
The Commitment of Traders report showed the Producer/Merchant/Processor liquidating longs while the managed money and other reportables adding to their net long positions. This is significant because it was not investment liquidation as we had originally suspected. As it stands from Tuesday, the "managed money" is holding a net long corn position of 323,629 contracts and 237,671 net long contracts of soybeans heading into harvest!
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