EHedger Afternoon Grain Commentary 11/1/12
Nov 01, 2012
Grains closed mixed with heavy bear-spreading in corn. December corn closed 4 ¾ cents lower at $7.51 while December 2013 closed 3 cents higher. This may be in anticipation of the Deutsche Bank roll which begins tomorrow. January soybeans closed 11 ¼ cents higher at $15.60 and December wheat 4 cents higher at $8.68 ½.
It was the first day of the month and we had money flowing back into soybeans again. May soybeans had the strongest close but they are still at a 65 cent discount to January! Strength was partly attributed to strong economic data out of China and sharply higher outside markets in the US. Corn’s support tailored off as we progressed towards the close.
Wheat’s crop rating was below market estimates but didn’t seem to overly support wheat. Even after the midday forecast showed a significant precipitation decrease in Hard Red Wheat Country the market still came off its highs. Nebraska to eastern Kansas and Oklahoma had forecasted 1-2 inches of rain previously and now is looking at a range of 0.10-0.50 inches. The market continues to gravitate and hold near its 50 day moving average which is currently $9.04 ¼ for December KC wheat.
After the market closed FC Stone released its crop production estimates. They are expecting corn yield to be 124 bpa and production at 10.881 billion bushels. The USDA is currently at 122 bpa and 10.706 bill bu. FC’s bean yield is 39.1 compared to the USDA’s 37.8. They have production pegged at 2.959 compared to the USDA’s 2.860. An increase of 100 million bushels of soybeans and 175 million bushels of corn would certainly loosen up the tight balance sheets. We just have to see how seriously the markets take these estimates over the next 24 hours. We also will get Informa’s estimates tomorrow around 10:30 am.
The storm delayed the weekly export sales and they will be released tomorrow at 7:30 am CST. Estimates for the report:
Corn 110,000 – 400,000 MTs
Soybeans 500,000 – 700,000 MTs
Wheat 300,000 – 600,000 MTs
The average price for October corn was $7.50 and November soybeans was $15.39. Now that the Harvest Price for crop insurance can no longer fluctuate it is important to re-evaluate where your marketing plan stands for downside price coverage.
Corn found technical resistance at its 50 day moving average. Look for next support at the 100 day moving average at $7.43 ¼. The 100-day has been technical support over the past 3 trading sessions.
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.