EHedger Afternoon Grain Commentary 9/20/12
Sep 20, 2012
The recent downtrend has resumed with December corn falling 10 ½ cents, December wheat down 2 cents, and November soybeans down 50 ¾ cents.
The Weekly Export Sales Report was very negative for corn at 69,900 MTs (300-400 expected). Obviously we have seen a lot of export demand rationing for corn. Soybeans sales were 717,000 MTs the majority of which was going to China and "unknown destinations" (expectations were calling for 600-800). Wheat came in above estimates at 488,900 MTs (expectations for 300-400).
Wheat held the most support today which we can partly attribute to the strong sales. On the other hand soybean sales were at the high end of estimates yet they had the largest selloff. Open interest hardly changed for beans over the past couple of days but I would be surprised if we didn’t see a sharp drop in open contracts after today’s trade. We will see that on the Volume and Open Interest reports tomorrow morning.
There are clearly market fears dictating these massive price swings as every new low seems to be met with heavy sell stops. We know that the "managed money" is still holding an enormous net long corn and soybean position. Liquidation from that group would be concerning for the bulls but we still haven’t seen a major drop in open interest to give us that signal. Tomorrow’s Commitment of Traders report should also shed some light on this.
Yield reports continue to flow in with ultra-high variability. The September Stocks Report will also be difficult for the market to estimate due to the large amount of new crop that may be included in the stocks count. The stocks report will be released Friday, September 28th.
The USDA announced that starting January they will be releasing their NASS and WAOB reports at 11:00am CST. This shouldn’t change much from how it stands now since we already have live markets during report releases.
For now we want to remain with sustainable hedges as we progress through harvest. To sign up for a free EHedger trial please click on the link below.
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