EHedger Afternoon Grain Commentary 10/18/12
Oct 18, 2012
Grains closed with double digit gains Thursday. December corn closed 15 ¼ cents higher at $7.60 ¾, November soybeans 36 ¼ cents higher at $15.45 ½, and December wheat up 12 ¼ cents at $8.68 ½.
The strength from the overnight session carried right through the export sales report this morning. Corn and soybean exports fell short of the average market guesses but topped the wheat guess.
Export Sales Report Estimates:
ESTIMATED RANGE ACTUAL
Corn 150,000 – 300,000 MTs 166,700 MTs
Soybeans 650,000 – 850,000 MTs 525,200 MTs
Wheat 250,000 – 400,000 MTs 410,000 MTs
Despite the fact that soybean sales were below the average guess they were still well above the average needed per week to meet the USDA estimate. At this point we need to sell 8 million bushels per week to make it to the 1.265 bill bushel estimate. This week we did 19.2 million. If we continue to sell at this pace it will encourage further rallies to ration demand. This is a good reason to pull marginal hedges over to the cash market especially since the market is paying a premium for November beans over the spring and summer months. If you want upside potential please call us to go over purchasing March – July soybean calls. The world market is relying heavily on South American production especially this year and any hiccup in weather down there will likely result in stronger prices in the US.
Export demand for corn continues to look dismal but basis levels remain strong. Rumors of ‘potential’ Chinese corn importing circulated today and seemed to support price action. Producer selling is also starting to slow.
December corn closed back above the 9-day moving average which is short term positive. The exponential oscillator is again at positive territory is also friendly. Near term resistance may be found at the 50 day moving average of $7.75 ½.
November soybeans closed back above the 9-day moving average which is short term positive. The gap from the 4th of July started to fill this week but was unable to get to the $14.78 target level. This may be enough to slow technical liquidation for now especially since we are starting to see beans come off oversold levels. First resistance is seen at the 100 day moving average of $15.55 ¼.
Friday Informa will release their 2013-2014 acreage estimates around 10:30 am. We also have Cattle on Feed and Commitment of Traders after the close. To discuss opening an EHedger brokerage account, please call us at 1-866-433-4371. Our office hours are Monday through Friday 7am – 4pm.
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