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.
Closing Grain Commentary July 19th
Jul 19, 2010
Grains had a big reversal off the highs today, with new crop corn and soybeans 13 cents lower. Weather was the main factor behind today’s break. Sunday night the market opened sharply lower and carried that weakness through today’s close. Export inspections today were as-expected for corn, weak for soybeans, and better-than expected for wheat.
Friday’s COT report showed that by last Tuesday, Large Traders/Funds have bought over 200,000 contracts of corn, over 75,000 contracts of beans (between beans/soy meal/soy oil,) and over 70,000 of wheat. This is important now because there are fresh longs in the red. Much of the corn bought on Thursday and Friday was above $4.04. This kind of negative pressure could force some large traders out, essentially pushing the market lower.
Crop progress this afternoon was mixed. For corn the good/excellent rating fell by 1 percent to 72%. The percent silking jumped from 38% to 65%, well above the 5-year average of 47%. For soybeans, the good/excellent rating was up 2% to 67%. Winter wheat is 71% harvested compared to 74% on average.
There are still many unknowns in the market. It is unknown what the production loss will be for Russia’s wheat crop, or the course grains in Canada/Europe. China’s stocks report is coming July 27th, which will give us more insight to China’s future demand. This could move the market either direction. With such a massive spec long position recently entering the market, it is a big gamble for them to take and the moves could be quick and volatile. Having orders in above the market is important if you need to get caught up on sales. Between our September calls we bought and put/call strategies, we believe we have enough upside potential to stick with our current positions in case of another sharp rally from here. *** Updates made today: see latest hedge recommendations ***
The forecast calls for more rains in the next 6-10 days. This was quickly worked into the market on Sunday’s open. We will have to continue to monitor the forecast to see what develops. If the weather turns hot and dry we could certainly see another move higher from here. If the weather remains unchanged at favorable, we would likely see this premium come out of the market like we saw today. As always please call you broker with any questions or for the latest recommendations.
Get More From EHedger.
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
Get Organized. Get Ahead. Get EHedger
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.