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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 11-18-2011

Nov 18, 2011

Grains finished mixed after trading sharply lower early in the session.  December corn settled 4 ¼ cents lower at $6.10 ¼, January soybeans finished unchanged at $11.68 ¼, and December wheat finished up 5 ¾ cents at $5.98 ¼.

Despite the early weakness we did find strength going into the end of the day taking us higher in beans/wheat.  This morning the USDA announced a bean sale to China for 124,500 MTs.  Other than that there was not a whole lot of new fundamental news out in today’s trading session.  After the close however we did get the Cattle on Feed numbers as well as the Commitment of Traders data.  The Commitment of Traders report shows the Managed Money increasing their net short on Chicago wheat by 10,695 contracts, reducing their net long in corn by 21,370 contracts, and reducing their net long in soybeans by 18,140 contracts (all numbers discussed are using combined futures and options).  For soybeans Managed Money is only holding a net long position of 10,133 contracts, which is a significant reduction!

Cattle on Feed:

                                              Estimated                            Actual

On Feed November 1st                104%                                     104%

Placements During Oct                  99%                                       99%

Marketings in Oct                        101%                                     103%

The feed wheat story is still a very important key to this weakness in feed grains.  With the price of wheat still undercutting the price of corn around the world we have to imagine that the price of corn is going to have a hard time being supported by much export demand.  I have talked about all of the examples of feed wheat being purchased in these past few weeks especially in the Asian countries.  As long as this is the case I find it hard for corn to stay at these price levels.

Fundamentally we still stand bearish especially in the wheat and corn markets.  Technically we are starting to point lower as well in many of these products.  The 50 day moving average for corn has crossed below the 200 suggesting the longer term trend is heading lower.   Please call EHedger if you would like to discuss developing a marketing strategy for 2012. Our grain marketing software can help you discover your risk based on your current strategy and help you make marketing decisions going forward.  Have a great weekend!

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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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