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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 Closing Grain Commentary 9-14-10

Sep 14, 2010

It was another strong day in the corn market. After a sluggish start to the day corn settled the day 11 ½ cents higher for the December contract at $4.95. November beans finished the day 1 cent higher at $10.35. The wheat market struggled after news came out this morning from Australia that ABARE had raised their 2010-2011 wheat crop estimate from 22.138 mt to 25.09 mt. This caused the wheat market to settle nine cents lower for December Chicago wheat at $7.36.

 
The corn market continues to make new highs for the move based on disappointing early yield reports. The trend may continue if we do not begin to see better reports out of the northern parts of the corn-belt. Yesterday’s crop progress report showed 11 percent of the total crop as being harvested. We still have a ways to go and these levels appear to be solid places to catch up on sales. It is never a bad idea to place scaled up orders in at levels that would be profitable for your farm operation. There is no way to tell if the funds will continue to build on their already sizable long position. Basis levels have widened out and this may not get any better without a break in corn. It appears in our opinion that corn is trying to ration demand and buy acres. As I mentioned earlier, if the yields do not improve this may keep corn heavily supported. We are sticking with our hedges at this time. If you have any questions about our recommendations or would like to look at getting additional protection on as we progress through harvest please get on touch with your broker.
 
Today’s action in the bean market appeared to be driven by the dollar and the buying of commodities in general. Early yield reports for beans have been very positive and it still appears in our opinion that beans have the most bearish fundamentals going forward. If the bean yields continue to come back positively these are going to be levels that are good to be getting caught up on sales. As is the case with the corn market, if outside money continues to flow in a scaled up approach for sales would be wise. Please get in touch with your broker to discuss the best strategies for your individual operation.
 
As I mentioned earlier, this morning it was reported that the Australian Bureau of Agricultural and Resource Economics (ABARE) revised it 2010-2011 wheat crop estimate from 22.138 mt to 25.09. This revised estimate placed pressure on the wheat market for the entire session. Wheat is still concerned about harvesting delays and quality concerns in Russia, Canada, and Europe. The last day for the crop insurance price to be set is tomorrow and it appears that the price is going to be right around $7.15. At this level it feels like we will have a strong increase of acres here in the US at these levels. We will also begin to look at futures and option strategies based on this guaranteed price so please get in touch with your broker to discuss these strategies.
 
 
 
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Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. 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 E Hedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold E Hedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.
 
 
 
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