EHedger Closing Grain Commentary 11/4/10
Nov 04, 2010
Thursday corn, soybeans, and wheat all closed sharply higher mostly due to the Weaker US dollar.
Grain’s strength can be mostly attributed to follow through buying from the FOMC report yesterday which is helping most things Dollar based including stocks and commodities. Corn and soybeans both made new highs for the move. Export sales this morning were strong for soybeans, but rather weak for corn and wheat. Soybean weekly export sales were 1,616,200 MT’s, while corn was at 461,600 MT’s and wheat was 605,600 MT’s.
The market is looking ahead to its next report on Tuesday November 9th for further direction. Average analyst estimates put the corn yield at 154.4 bpa with production at 12.545. Average estimates for soybeans put yield at 44.6 and production at 3.426. Of course the US Dollar and other outside market forces could continue to have a large influence on grains.
For wheat the bullish attributes are the crop condition. The good to excellent category for wheat was at 46% which is well below the average for this time of year. On the negative side exports haven’t been that great. This should hold wheat range bound unless we see a further decrease in crop condition on Monday’s report.
We like remaining with the strategy of being well sold with spring call spreads for upside potential. Please call your broker if you need to get more protection on before Tuesday’s report.