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September 2010 Archive for Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Do You Need To Re-Own Corn???

Sep 29, 2010

Many readers have contacted me during the past few weeks asking about strategies they could use to re-own corn. For some, they had been following advisors or programs that have gotten them oversold.  For others, they simply didn't produce the yields they had anticipated and are coming up short their commitments. 

As I continue to preach, getting over-sold in today's markets can be fatal. Several years back you could have gotten away with it, and even been successful at times. In the past few years, with more and more fund money and increased volatility, getting oversold can often times be catastrophic to the operation. 

Tomorrow the markets may present us with another opportunity to re-own corn. For my daily subscribers many followed our lead and bought on the morning break and now have an early profit in the position (sometimes it is better to be lucky than good).  

Early tomorrow the U.S. Department of Agriculture will release their quarterly corn stocks estimate, on average analyst project the stocks to come in around 1.407 billion bushels.  I am hearing it could range anywhere from 1.350 billion on the low side to 1.489 billion on the high side.

Those numbers are all down from the stock level of 1.673 billion a year ago.

As I have been mentioning we may see a much greater number than most have anticipated because early harvest in areas of the South may get counted in with the old crop supplies. I am sure this has happened in some areas and will certainly cause higher ending stock numbers. 

Here is the kicker, I think the funds have obviously realized this same thing and have exited or squared positions anticipating a bearish report and higher numbers. They have broke the market over 5% in the past few days and had it down early again today.
 
Smart money has realized if this reports comes in neutral to slightly bullish we will be off to the races once again. If the report comes in bearish we will more than likely open lower, but trade higher on the day as the funds step back in.  It will take a seriously higher ending stocks number to keep us down long. It wouldn't surprise on a bearish report to see us down 15-20 early in the session only to close significantly higher. 
 
If the report is neutral to bullish we will easily be 10-15 higher. 
 
You should anticipate similar action ahead of next weeks USDA report also.
 
***We continue to advise re-owning the breaks. Aggressive traders may want to consider buying this market today and holding it through the report.  Expect profit taking on a rally to stall this market out early next week as funds prepare fro the next USDA report.
 
If you want to receive or daily commentary and specific marketing strategies be sure to get signed up for our FREE Daily Report. There is absolutely NO Commitments and No Obligations for the service.   
 
Each report is jammed pack full of market commentary and daily market strategies direct from the trading floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques.

Soybeans May Be More Bullish Than Everyone Thinks!

Sep 24, 2010

 

Soybeans May Be More Bullish Than Everyone Thinks!
I released this information today before the open in our Free Daily Report. Be sure you get signed up below there is NO Cost or obligation.
 
Things are starting to change rapidly in the bean market and you need to take note of the recent developments. Yes we are still hearing reports of larger than anticipated yields in most areas, but some are seeing more problems than we originally may have anticipated.  In addition there are several other recent possible game changing events gaining hold in the market. 
 
The latest turn of events may have came yesterday when Informa reduced their estimated 2010 US soy acreage down by 1.4 million acres from the USDA’s current projection. This sharp of a reduction coming from Informa is very unusual at this point in the game, and has me extremely concerned. If these numbers are even close to accurate, regardless of higher yields, the US soy stocks situation in 2011 could tighten dramatically.
 
We have also pushed back planting by more than three weeks in central Brazil on continued dry weather patterns. As I mentioned in the South America report, this will not necessarily hurt yields, but it will put continued added pressure on US the ending stocks as South American beans will be delayed at least by a month in later parts of next year. I am not even going to get into the whole La Nina weather concerns, but if South America does see continued dry spells you may see yields start to be affected.  
 
Soybean stocks at the mills are now at 42 million vs 45 million last year. Some of the big boys think that the reduction in milling stocks may force the USDA to estimate lower ending stocks in the September 30th report. If this happens it could cause the bean markets to jump even higher. 
 
On the demand side of things all reports indicate that China now needs to buy about 10 million bushels a week in the world market to meet their needs. Weekly US export sales are up 4% from a year ago. 
 
Trade Strategy: Those of you looking for an alternative play may want to consider building a long position in Soybean Oil. Sources have recently told me that our oil stocks are now at 3.3 million, and have declined significantly since July. In other reports I have read that implied US domestic August soyoil use is actually up about 5% from last year. I have also heard that world biofuel demand will grow by well over 3 million metric tonnes next year. Total world demand for oils and fats right now is up over 7 million metric tonnes and production is reportedly up only 6 million. On the flip side I think Soymeal may start to weaken. I like getting long Soybean Oil and spreading it off against the Meal. 
 
If you are looking for specific strategies or ways you can improve your marketing efforts, be sure and sign-up for our FREE Daily Ag Hedge Newsletter. Each report is jammed pack full of market commentary and daily market strategies direct from the trading floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques.

 

 

Where Cattle Prices Are Headed

Sep 23, 2010

 I have had a lot of questions as of late about the cattle market. As in the grains there are really two sides to this story, the actual fundamental supply and demand picture and the way this damn thing trades on the board. 

 
Fundamentally I have heard that the packer margins have fallen negative and has already or will quickly reduce the number of kills scheduled. Demand on the other hand still continues to remain intact. With this in mind you have to believe the production cutbacks, along with the price action on the board will ultimately pull down the cash price, this though should help build a nice floor under the beef market. Now if demand starts to waiver all bets are off and we could drop out of bed. I don’t foresee that happening, but I have traded long enough to know anything is possible. 
 
I think the longer term picture still remains bullish. We have a small herd and good demand. Corn prices may deter some expansion programs initially but longer term demand should more than outweigh and justify any additional input costs.   
 
The second part of the equation is a little trickier to explain. As we sit, the "large-spec" traders currently hold a new record number of net long positions in this market (slightly over 133,000 contracts). That means almost 90% of all reportable spec traders in this market are long cattle. You don't have to be a rocket scientist to understand that if all of these traders start to head for the exit door at the same time there will be a huge amount of sell orders flood the pit. This scenario would drastically rock prices as the market tries to adjust.  In addition, with this many already net long, you have to wonder how many new buyers are going to be stepping in at these price levels. Of those currently long you have to also wonder how many will be willing to buy more as we move higher and how many will actually be sellers looking to offset their long positions and take profits as we move higher.
  
I certainly want to get long this market, but with the prospect of massive long liquidation still looming I can only comfortably recommend being patient. I continue to think we may see an opportunity as prices fall back to levels that are not justified by the existing supply and demand picture. I am going to continue playing the $95-$100 range in the fats. Aggressive traders can sell both calls and puts outside of these limits. Those wanting to trade the outright futures might want to take a scaled approach and look to add long positions on breaks below $96.50 which is right around the 100-day moving average. I personally will be looking to establish longer term bullish positions at $97, $96, $94, $92 & $90 levels if we happen to see panic type selling from the longs.
 
Give us a call if you need help designing some low margin strategies to make this play (816) 322-9800.
 
Don't forget to sign-up for my daily commentary and trade strategy report. It is Free of charge and there are no obligations. It is jammed packed with daily trade information and strategy that I receive from floor traders and fund mangers I have worked with in the past. The information is sent directly to your e-mail. Just follow the link below, or sign up at our website www.aghedge.com  

Can Wheat Prices Keep Pace with Corn & Beans

Sep 17, 2010

I wanted to talk about Wheat for a change. I know I have been on the big bull band wagon, and actually was one of the the first to predict the big move higher right here on Ag Web several weeks back. I wanted to let my followers know that as of today I have exited several of our long wheat trades and have have started to become more cautiously bullish, possibly even starting to look at positions to implement with a bearish tilt. 

 
I know there are fears of tighter ending stocks if the USDA is forced to raise exports, but I am just starting to wonder if that will ever really happen. US ending stocks are currently at the second highest level in the last 11 years, and actual soft red winter ending stocks are projected to be at their second highest level in all of history. I am just starting to think slower export sales might soon have an effect on wheat prices and cause us to come up well short of the USDA’s projected export estimates. 
 
From the reports I am starting to hear I just wonder if we have not grossly over-estimated this number in the heat of all the excitement. Even with the the strong export sales we have seen up to this point, we will need to average nearly 18 million bushels per week for the next 9 months to reach the USDA projections. I just don't see it happening unless the US Dollar gets hammered (which is highly unlikely now that the Bank of Japan said they are going to intervene), or some key growing regions in other parts of the world have catastrophic problems. 
 
Think about these facts, during the last six years, not one single time has average sales from this point forward ever even been over 14.5 million bushels per week not alone 18 million per week. Certainly you have to consider that with the massive reductions in the Black Sea region we will see more exporting, but how much more?  To meet expectations we will need to see the highest weekly sales that we have ever seen in the past 15 years.  Not to mention that as we move forward we are almost certain to see a higher number of wheat acres planted both here in the US and on a global scale.  
 
In fact planting is well underway for winter wheat here in the US and recent rains have to be considered beneficial. I am hearing the same story in India, where good rainfall has boosted their 2011 wheat production estimates. I am also hearing that wheat stocks in india are now above 30 million tonnes, almost eight times higher than what they had original set for their goal. The thing I can't figure out though is that even with huge supplies, India continues to basically ban private wheat exports. If they get into the export game you can kiss the USDA estimate goodbye.  
 
Those of you who follow our daily report know that we have been long Corn and short Beans since August 18th at a 5:2 ratio. This trade has been extremely generous and has produced profits in excess of $17,000 per unit. With this in mind I began rolling out of the short Nov beans today replacing the position with short Dec wheat contracts in order to spread off some of our long corn exposure. I am not necessarily telling you to get outright short the wheat market but you may want to consider it the new dog of the group as we head higher. 
 
I hope all of you are signed up for my daily commentary and trade strategy report. It is Free of charge and there are no obligations. It is jammed packed with all kinds of daily information and strategy that I receive from floor traders and fund mangers I have worked with in the past. Throughout the day you can now get my information sent right to your e-mail.
 
Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques. 
 
 

What Happens To Corn Prices In The Coming Months

Sep 14, 2010

This is a recent excerpt from my Daily Report, I talk a little about what you can expect to see from corn and bean prices during the coming weeks...hope you enjoy! 

CORN: I have been talking to a few traders who are a little concerned about the USDA's tendency to increase yield numbers historically in October and who are worried about the USDA increasing acreage. For at least the past 25 years some of the most dramatic changes or revisions have happened in the October report. On average the USDA actually raises it's estimates by just over 100 million bushels, or about 1%. You also have to be aware of the fact that they always seem to find more bushels as we get closer to November. Corn crops, especially the big ones tend to get bigger in the later estimates. 

 
I recently read in a report that since 1994, there has only been only eight years that the September corn yield estimate were actually below the August estimates, and in only two of those years did they actually reduce their estimates even further in the October report. 
 
This more than likely happens because as maturity and harvest moves north, ear weights and ear counts are adjusted accordingly by the USDA. From what I am told, right now the USDA uses the five-year average ear weights in places where the crop is not mature enough. Once it becomes mature the actual grain weights are estimated and confirmed by drying them down. What happens then is that more of the actual numbers from the higher-yielding Corn Belt states are represented in the October and November report than in the August and September numbers. If those yields and weight are above the five-year average, they will more than likely make upward revisions to their total yield estimate. 
 
We also need to be aware of the fact that some firms believe believe our final harvested acres could be at least a million acres larger than they used this month. That change in the acreage alone could add over 160 million more bushels to the big picture. 
 
I am not trying to scare anyone out of being long this market I just want you to understand that they can twist and turn these numbers in a million different directions, and manipulate them in any manner they deem appropriate.  Longer term I continue to believe we will be trading significantly higher. Most yield estimates so far are coming in anywhere between 10-20% below last years numbers. While the current USDA estimate has us less than 2% below last year. 
 
Sure you can make the argument that most of the poor yields have come from IL and IN and things will improve as we move North. the problem is we would need to see crops beat last years number by 10-20% to off-set the losses we have witnessed to this point.  Sure, in the past week we have seen a few fields come in better than last year, but by just a small percentage.  If we assume that there are more fields that will come in better than a year ago and trim some of the losses we have seen to this point, I think we can project and conservatively estimate a total reduction across the board of between 5-7%. If that happens, yields will be in the 152-157 range, and ending stocks to usage will become extremely tight. 
 
SOYBEANS: I know I have not been reporting as much about soybean as I have corn the past few weeks, but to be honest corn is stealing the show. Soybean supply levels look to be in descent shape, and the crop in both the US and in South America look like they may be better than initially anticipated. I have had a few producers ask what I thought would happen to soybean prices if we rally corn to the $5.50 range. I think there are a ton of variables to consider, and it will be tough to gauge as the market attempts to bid for spring acreage versus corn. I know this is very vague, but I would have to believe if corn trades up to $5.50 beans could realistically move into the $12-13 range.
 
WHEAT: Most of the traders are keeping a close eye on Russia and the debate on how many winter wheat acres will actually get seeded in time. The word from our best sources tell us that less than 30% of the land designated for sowing winter grain has actually got enough rain for planting. Some areas are improving but other key growing regions are no where close to being ready.  
 
If you are looking for specific strategies or ways to improve your marketing efforts, please be sure and sign-up for our FREE Daily Ag Hedge Newsletter.  Each report is jammed pack full of market details and daily market strategies direct from the trading floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques. 

How Corn & Bean Prices Will Respond to the USDA Report

Sep 09, 2010

All eyes will certainly be on the big USDA report out tomorrow morning at 7:30am CST. The floor traders are looking for the Corn yields to come in around 163.8 bushels per acre from the USDA. If we come in at or above this number the data will be perceived as bearish, with a record number of longs you can be assured the knee-jerk reaction will be much lower. I anticipate any break will be short lived as fund money will step in to protect their massive long positions and buy the market back.  

 
If you are a producer and you are looking for an opportunity for re-ownership because you oversold too early, this may be a great opportunity. For those looking to get long this market look to buy on the break. 
 
If we see the number come in closer to the 160 level we may see the market shoot higher. I think as move later into the day you will see heavy profit taking into the weekend, and longs will be once again banking a portion of their profits. With this is mind I think you will see the market pull-back off the run higher on any bullish news. 
 
The final scenario you need to consider is that the USDA comes out with a number that shocks the market and is considerably lower than anticipated. This could happen, as this September report will not be like any in the past several years. You have to understand that with 86% of the US corn crop being in dent and 33% all ready mature (a year ago just 48% in dent) the NASS will be able to pull enough ears and dry down the corn mechanically to provide an accurate reading of the 2010 crop. This year’s September estimate should be like last year’s October report - the big yield surprise could actually hit this month rather than in Oct or Nov because the NASS has a greater share of their test plots harvested across the south. If you look back to the August report that NASS was able to pull ears and mechanically dry down 8% of its samples (all in the south).  
I don't want to scare you, but I wanted to let you know how it could happen.  If they pull from the test plots in the South they may project significant reductions in yields. In this scenario the market could trade limit up into the weekend. 
 
Inside The Numbers: 
 
Corn - The Yield # should come in between 160-165 bushels per acre. Anything greater than 164 will be a real short term bear. Below 161 and we will be off to the races. 
 
Soybeans - Look for the Yield # to be in the 42.5 - 45 range. Anything above 44 will be short-term bearish. Below 43 and we will see higher prices. 
 
If you are looking for specifics strategies or ways to improve your marketing efforts, please be sure and sign-up for our FREE Daily Ag Hedge Newsletter
 
Each report is jammed pack full of market details and daily market strategies direct from the trading floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading technique

Why Some Traders Believe Soybeans Could Reach $11.50

Sep 07, 2010

Corn has certainly been the topic of great concern as of late, but I have had many clients asking about Soybeans and specifically what we are hearing on our of the trade. 

 
To begin with lets assume the yields come in somewhat as expected between 43.5 - 44 bushels per acre. This will put our soybean carryout somewhere between 200-220 million bushels (depending on who does the math). Based on the way demand has risen the past few years this could ultimately leave us in a relatively tight stocks situation, but more than likely one that would not worry the floor or cause any significant jump in price. Now if we see problems during the planting stages or growing seasons in South America all bets are off and prices could in fact be off to the races. 
 
Now lets assume we see bean yields fall slightly and they come in somewhere between 42.5 - 43 bushels per acre, or later in the year we see a bigger jump in soybean demand than we expected. This could reduce the US soybean carryout to 120-150 million bushels (depending on who holds the pencil), which in this case would certainly send prices higher. 
 
If we come in with yields in excess of 44 bushels per acre you would have to assume this as bearish data. 
 
Don't get caught short or think prices will fall back long term though on news of higher yields. Sure we may fall back on the knee jerk reaction, but ultimately prices will find support and look to move back to higher ground. There are several key factors now coming to light that have us and many other traders thinking longer term price action will be much higher.  
 
If you are interested in hearing more of the details and specifics about price projections and trade strategies be sure to sign up for our FREE Daily Ag Hedge Newsletter
 
Each report is jammed pack full of all the details and daily market strategies direct from the floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow this link to our website and sign up for free. 
 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques

Why the Funds Believe Corn Could Go To $6.00

Sep 02, 2010

I have had a huge response from producers and traders wanting to know my thoughts and opinions as of late about the Corn market. In particular producers want to know what I have been hearing from the trading floor, the funds and from my other grain trading connections around the globe. To summarize, I have include a brief list of issues that most of the big traders are worried about as we move forward. For more specifics and detailed strategies be sure to sign up below for my daily e-mail updates and market strategy report. We send the information out Free of Charge and with No Obligations.

 
There is absolutely no doubt in my mind that Corn prices will trade higher. The question becomes how high will they go and how soon will it happen. Certainly we may see some sideways action or even a slight pull-back but rest assured this market is getting poised to make a significant run to higher ground. 
 
* Demand is simply unprecedented and looks to continue to grow as we move forward in the coming months. In fact the word we are hearing out of China is that they are now drifting cautiously below a critical stock level, and during the next couple of years have plans in place to be aggressive buyers of corn on fears of possible wide spread shortages. I know we have all heard the China story a million times. the word this time around is that they have flushed old corn just like they  are trying to flush out old crop beans with plans to replace the old with new in the coming years. I am not talking about massive one time purchases but rather additional small continuous buys to refresh and replenish their supplies.
 
* In addition you have ethanol demand rising each month. The US Energy Information Administration released its weekly ethanol production data yesterday and now show production at an average of 856,000 barrels per day. This is up 21,000 barrels per day (2.51%) versus last week and up 129,000 barrels per day (17.74%) from last year. If we pass the bill to allow 15% versus the 10% margin the demand for corn could get significant.
 
* The big kicker right now has to be additional fears of lower yields. Certainly seasoned traders have to believe the market has a 162 yield currently factored into the current price of corn. The USDA estimated the crop at 165 in their August report, but will more than likely lower it next week into the 160-163 range. I believe this number is currently priced into the market. I don't believe we have a 150-155 number priced into this thing, unfortunately before it is all said and done I think we may ultimately see it there. 
 
* Corn is now trading at a new 8-month high and now needs to be carefully evaluated as we could well be on our way to significantly higher ground. 
 
* Demand is simply unprecedented and looks to continue to grow as move forward in the coming months. In fact the word I we are hearing out of China is that they are now drifting cautiously below a critical stock level, and during the next couple of years have plans in place to be aggressive buyers of corn on fears of possible wide spread shortages
 
* In addition you have ethanol demand rising each month. The US Energy Information Administration released its weekly ethanol production data yesterday and now show production at an average of 856,000 barrels per day. This is up 21,000 barrels per day (2.51%) versus last week and up 129,000 barrels per day (17.74%) from last year. If we pass the bill to allow 15% versus the 10% margin the demand for corn could get significant.
 
* The big kicker right now has to be additional fears of lower yields. Certainly seasoned traders have to believe the market has a 162 yield currently factored into the current price of corn. The USDA estimated the crop at 165 in their August report, but will more than likely lower it next week into the 160-163 range. I believe this number is currently priced into the market. I don't believe we have a 150-155 number priced into this thing, and unfortunately this is where I think we are ultimately headed. 
 
* I don't think you will see very many large traders short the Corn market heading into the USDA's Sept report. Especially not this year. This is vastly different than in years past where the USDA has normally not made a large adjustment in the their estimates between these tow months. This year with the advanced maturity of the crop it will allow the NASS to pull ears and decipher actual ear weights. Remember, in August the NASS used an ear weight that was the 2nd largest on record and extremely high. A drop near normal ear weights could potentially cut US corn yields down to 160bpa or even lower. Just realize this number could be worse than the trade is estimating. I am not saying for certain that they will drop it big this go around but it could certainly be a significant cut. 
 
* Lets assume we leave the demand numbers unchanged (even though I believe they will increase) and we see a reduction of 349 million bushels (somewhere in the 160 yield range) in production, this means our ending stocks would come in around 960 million bushels and leave us with a stocks to usage ratio of just above 7%, or the second lowest levels in our history.  If demand continues to grow this number could shrink in a hurry.
 
* I spoke with a trusted friend from an elevator in Indian. He took 2009 corn at 13% moisture and it took 74k kernels to make a bushel, he then took and dried down the 2010 corn to 13% and it took well over 90k kernels to make a bushel. I think this is where we are going to be caught off guard. I am no agronomist but from what i ma hearing from our clients in the field the kernels simple didn't get much depth due to the heat. From the outside they didn't look bad, but once the farmers are getting into the ears there is just not a lot there.  If this is the case we wont see the USDA make this adjustment until at least October and maybe even November. By then the funds and big traders will have jumped the market and we may be well above the $5.00 mark and heading higher.
 
With these circumstances in mind we are going to continue recommending that you buy breaks in this market and look to build a long-term bullish position. We personally believe you have around 30-40 cents of downside risk in this market currently. If you wait until we rally to the $5.50-$6.50 range the downside risk of getting long will have dramatically increased.  As I have preached all along, have your hedges in place and a reownership program ready to launch when you make your cash sales. I am afraid when this market moves to the next level it is going to be in a real hurry, so you need to be prepared. 
 
**Make certain you have signed up to receive our daily trade wire and strategy report, it is jammed pack full of all the details and daily market strategies direct from the floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow the link to our website and sign up for free. Free Ag Hedge Daily Trade Report 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques

Corn Yield Update

Sep 01, 2010

The  grain markets certainly want to trade higher today. Be cautious as both F.C .Stone and Informa will be issuing their crop estimates this week ahead of the USDA numbers due out next Friday. FC Stone will release theirs after the close today and Informa will report Friday morning. Please realize the  USDA will not have a whole lot more information than they had in August for this report, as harvest is just getting underway, and there is no time to get the numbers crunched. As a firm we don't personally expect to see much of a change until at least October and maybe even November. We are continuing to hear on our end though that corn yields are coming in well below last years yields in many areas. Beans on the other hand are starting to come in better than expected. 

**Make certain you have signed up to receive our daily trade wire and strategy report, it is jammed pack full of all the details and daily market strategies direct from the floor. There is NO COST or obligation and the report is e-mailed directly to you each day. Just follow the link to our website and sign up for free. Free Ag Hedge Daily Trade Report 
 
The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques

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