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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.

Wednesday's Grain Recap 1-25-2012

Jan 25, 2012

Grains finished mixed with more large moves in the spreads. March corn settled 4 ¼ cents higher at $6.34 ½, March beans finished down 6 ½ cents at $12.13 ½, and March wheat up 7 ¾ cents at $6.41 ¼.    

Not much has changed from yesterday. The market continues to move the corn/soybean spreads back in favor of corn, this time the corn is being led higher by wheat. The concern that Russia will put a tariff on wheat exports continues to float our front month wheat contracts. This is also the commodity with a massive short position held by the “managed money” and if they are indeed exiting the trade it could push this market even higher. Given the winter conditions in Russia/Ukraine, the spread between their prices and the rest of the world has probably bottomed until spring. If wheat prices around the world gain ground from this, this strength could easily transfer back over to US corn as our current supply situation becomes of higher importance/concern and that substitute is no longer an economically viable option.
Stronger wheat has been helping corn, but it has also been stronger interior cash bids. The lack of producer selling has kept the cash markets strong and futures are reflecting the strength as well. Short term I wouldn't be surprised to see the price of front month grains continue to rise between now and the first week of February.
This week we are expecting another big week for soybean exports as South American demand has switched back to US. This could be a temporary adjustment until their export business comes back on line.   Here are the average estimates for tomorrow’s Weekly Export Sales market:
Corn                              650,000 – 850,000 MTs
Soybeans                      700,000 – 850,000 MTs
Wheat                           500,000 – 700,000 MTs
Source: Reuter’s Poll
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Best Regards,
EHedger
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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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