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July 2010 Archive for EHedger Report

RSS By: Dustin Johnson

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 7/29/10

Jul 29, 2010
 

It was another positive day in all three grain markets as corn, wheat, and beans all finished higher. December corn settled 3 cents higher at $3.93 ¾. November beans finished the day 10 cents higher at $9.88. September Chicago wheat settled for the day 12 cents higher at $6.27 ½. This morning the USDA released their export sales numbers with corn coming back in-line with estimates at 960,000mt between new and old crop. Export sales for beans came back very solid at 1,400,000mt between old and new crop, this was above the top end of the estimates. Finally, wheat export sales were very strong coming back at 919,000mt which was well above the top end of the estimates.  Mid-day weather still indicates positive growing conditions should dominate the majority of the corn-belt for the next 7-10 days.

With the exception of some drowned out areas the corn crop still appears to be off to a strong start this season. As we continue to progress through the summer without any major weather problems it wouldn't be out of the realm of possibility to see above trend line yields. From a producer's prospective, famers have had the opportunity to sell these levels so it may take a continued rally to entice more famers to sell corn. With the crop insurance levels scheduled to be set between August 15th and September 15th aggressive marketing strategies should be looked at in order to secure profitable levels in all three grains. Please give us a call to be sure that every marketing opportunity for your farm operation is being taken advantage of. We did get another ten percent of 2010-2011 corn sold at $4.50 basis the July 2012 futures. If you were unable to place this order please get in touch with your broker to discuss this strategy.

Wheat continues to be a great unknown. It appears to us that the damage that has been done is done and we will just have to wait and see what the actual harvest numbers come back at. The market is trying to figure out just how much damage has been done and continued volatility should be expected. The best advice that we have been issuing to our producers has been to sell deferred futures and store the wheat. With the nearby futures gaining 50 cents on the deferred contracts we feel that if the basis is favorable and storage space needs to be made available for corn or beans making cash sales and getting out of these positions is a good move. As is always the case please get in touch with your broker to discuss your individual operation to be sure the best strategy is put into place.

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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.

 

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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.

 

 

 

Like corn beans continue to rally. We still feel that the bean crop is in good shape and barring any August weather should produce strong yields throughout the United States. With the funds adding to their long positions in both corn and beans coupled with a dollar that continues to make new lows it has made beans reach levels that are profitable for producers to sell. For those producers that need to get caught up on sales having resting orders in above the markets is never a bad idea.  Please give us a call if you have any questions about strategies to take advantage of these bean price levels.

Closing Grain Commentary July 20th

Jul 20, 2010

Another set-back for corn/wheat, but soybeans managed to close higher. Follow-through selling from yesterday was mainly due to favorable weather and fund activity. There was news that China was buying Sept beans which was supportive for Old and New crop today.

 

Today the funds were overall sellers of corn, beans, and wheat which helped keep the market lower for most of the day. On last Friday, the COT report showed that by last Tuesday, Large Traders/Funds had 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. We will look to this Friday's COT report for more insight as to Fund activity. 

 

The forecast calls for favorable rains in the next two weeks which could continue to keep corn/soybeans on the defensive. There is a chance for dryness in the Delta and some parts of the Midwest but weather remains favorable for most of the Corn Belt. 

 

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.

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.

 

 



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.

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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.

 

 

Closing Grain Commentary July 15th

Jul 15, 2010

Another sharply higher day for corn, wheat, and soybeans as strong export sales, a falling dollar, and weather concerns kept prices strong. To start the day we had weekly export sales this morning at 7:30 am. Corn exports came in at the high end of estimates at just over 1 million metric tons between new/old crop. Soybeans came in above estimates at 1.2 Million MT’s and wheat was at 309,400 MT’s. The US dollar was sharply lower posting over a 1000 point loss which is typically bullish for grains. The latest 6-10 day forecasts have factored in a chance for hot-and-dry weather towards the end of July. Dryness is more likely to be seen in the eastern Corn Belt. We will continue to monitor the updated forecast to see how this develops.   

 

For the past few months the world market has had cheap Russian wheat which was cheap enough for feed. We went from one of the most bearish world wheat scenarios to not so bearish. Canadian wheat was the first to get damaged from weather this year. Now with the Russian weather concerns running wheat on a $1.30+ rally off the lows, it opens the door to more US corn exports. With these changes as well as drier changes in the forecast, the market was able to break through the recent resistance and settle up at 405 ¼ (December Corn.) This is above the spring insurance price level and is a good place for producers to catch up on sales. With the calls that we have bought, as well as the recent put/call strategies we have placed, we believe we have enough upside potential to stay with our current hedge strategies.


Tight old crop supplies as well as weather forecast changes have led to the recent soybean rally. One of our concerns is with the recent weather damage to oilseeds, especially rapeseed. Canadian/European rapeseed are both expected to have lower production. South America has increased their vedge oil usage, and supplies will likely tighten. This could lead to a rise in Soybean Oil prices, but we do not believe this would warrant a similar rally in soybeans. This combined with a record South American bean output this year could be enough to see the price of beans head lower into harvest. This is how it stands right now; obviously have to first get through August without any major weather concerns.

For making wheat sales, we have seen a great difference in cash prices depending on quality. In the soft red wheat we have seen higher quality cash wheat bid for 50 cents to $1 over the futures while the lower quality was discounted as much as $3 under, so please check with your broker before you sell any cash wheat. If you would like more explanation to any strategies discussed please call you broker.

 

 

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.

 

Closing Grain Commentary July 14th

Jul 14, 2010

Corn, wheat, and soybeans opened higher and all traded sharply higher through the day.  Most of the strength today was from continued concerns over the Russian drought which helped carry the grains higher again. The US dollar was also down again today which helped provide support.  For the past few months the world market has had cheap Russian wheat which was cheap enough for feed. The latest USDA Supply and Demand report shows a decrease in expected wheat demand used for livestock and poultry. We went from one of the most bearish world wheat scenarios to not so bearish. Canadian wheat was the first to get damaged from weather this year. Now with the Russian weather concerns running wheat on a $1+ rally, it opens the door to more US corn exports.  With these changes as well as drier changes in the forecast, corn fundamentals could be enough to break through the recent resistance we have seen around $4 (December.)  With the calls that we have bought, as well as the recent put/call strategies we have placed, we believe this is enough upside potential to stay with our current hedge strategies.

Tight old crop supplies as well as weather forecast changes have led to the recent soybean rally. One of our concerns is with the recent weather damage to oilseeds, especially rapeseed.  Canadian/European rapeseed are both expected to have lower production. South America has increased their vedge oil usage, and supplies will likely tighten. This could lead to a rise in Soybean Oil prices, but we do not believe this would warrant a similar rally in soybeans. This combined with a record South American bean output this year could be enough to see the price of beans head lower into harvest. This is how it stands right now; obviously have to first get through August without any major weather concerns. 

So with this said I want to make sure everyone got the latest recommendations in corn/wheat/soybeans today.  For wheat, we have seen a great difference in cash prices depending on quality. In the soft red wheat we have seen higher quality cash wheat bid for 50 cents to $1 over the futures while the lower quality was discounted as much as $3 under, so please check with your broker before you sell any cash wheat. If you would like more explanation to any strategies discussed please call you broker.

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.

 

 

Closing Grain Commentary July 13th

Jul 13, 2010

Today was another mixed day for the grains. Dec Corn finished down 4 ¾, while Nov Beans were up 3 ½ and Dec Wheat was up 14 cents.  Today the US Dollar was sharply weaker and the energies and equities were sharply higher which helped Beans and Wheat hold strength.

Corn has continued to hold good resistance below $4. The midday forecast did include more moisture which helped bring corn down towards the lows in the later part of the day.  Crop ratings yesterday for corn were up 2 points in the good/excellent category to 73%. This was expected to drop a percent and was also part of the reason corn was the weaker compared to other markets. Crop ratings for soybeans came in as expected and dropped 1% to 65% good/excellent.

Wheat harvest is at 63% completed with the five year average at 65% and last year at 61%.  Trade talk today was mainly concerned about the damage to the Russian wheat crop after the drought they have had this year.  We are still below this year's highs of $6.33 in the December contract but we have gained a $1.03 off the lows we saw in June.

July grain contracts go off the board tomorrow and could be volatile especially for beans.  Our opinion is that the crop as a whole looks solid and we need to continue to monitor the weather as we move forward.  For producers who still need to catch up on sales, having your orders working is a good way to capture any intra-day rallies especially when the midday forecast has such an effect on prices. Extended forecasts will always be constantly changing, in our opinion this is volatility that needs to be taken advantage of. For the producer that is worried about selling the grain in a rallying market there are call options to protect these sales. Please get in touch with your broker to discuss a strategy for your individual operation.

 

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.

Closing Grain Commentary July 12th

Jul 12, 2010

Today the market had new crop Corn, Soybeans and Chicago Wheat all lower by the close.  Export inspections all came in below expectations this morning.  A stronger Dollar today and weaker energies also contributed to today's weakness.

December corn settled 3 ½ cents lower at $3.91 ¾. Corn has held good resistance below $4 and continued that trend today. Crop ratings for corn came in up 2 points in the good/excellent category to 73%. This was expected to drop a percent so this could be seen as bearish to start tonight's trade. Crop ratings for soybeans came in as expected and dropped 1% to 65% good/excellent.

As far as weather goes there is concern of a ridge setting up in the 11-15 day forecast. Currently there is plenty of moisture in the Midwest and Delta so we are not too concerned at this point but it is something to monitor. Friday's USDA Supply and Demand Report was neutral but last week's export sales were good and helped provide support. July grain contracts go off the board on Wednesday and could be volatile especially for beans.

Our opinion is that the crop as a whole looks solid and we need to continue to monitor the weather as we move forward. We feel that for producers that need to catch up on cash sales or hedge protection should be placing scaled up orders in at these to take advantage of this rally. It may go higher from here but having resting orders placed will allow the producer to take advantage of a continuing rally. Extended forecasts will always be constantly changing, in our opinion this is volatility that needs to be taken advantage of. For the producer that is worried about selling the grain in a rallying market there are call options to protect these sales. Please get in touch with your broker to discuss a strategy for your individual operation

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.

 

Closing Grain Commentary 7/9/10

Jul 09, 2010
This morning the USDA released a Supply and Demand report along with their weekly export sales figures. The overall reaction to the report was fairly neutral for corn and beans and bearish for wheat. Export sales were solid for both corn and beans and came back in line with the estimates for wheat. Beans were strong all day and this looks to be on fears of crop stressing weather. Our weather analyst still is of the opinion that the weather for the majority of the corn- belt is non- threatening. Weather markets are difficult and the volatility that we have seen will probably continue until the crops are made. For producers that need to catch up on sales having resting orders in above the market is the best way to use this volatility to your advantage. Below you will find the entire USDA Supply and Demand Report. If you have any questions about your individual operation or are simply looking to get more protection on as we progress through the summer, please do not hesitate to give us a call.

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.





 

Closing Grain Commentary July 8th

Jul 08, 2010

All three grains finished the day stronger in anticipation of a bullish USDA Report. We will find out the results tomorrow morning as the USDA will release a Supply and Demand report along with wheat production at 7:30am. In addition to this report we will also have export sales numbers which have been pushed back a day due to the Fourth of July holiday. Below you will find the average estimates for tomorrow mornings report. The estimates for corn export sales are between 800,000-1,100,000mt. The estimates for bean export sales are between 500,000-750,000mt. Estimates for wheat export sales are between 350,000-450,000mt. Tomorrow morning we will release our opinion of the USDA Report in both our morning and afternoon commentaries. If you have any questions about your individual operation and the protection that you need as we progress through the summer, please do not hesitate to give us a call.




Commodity    Estimate Range        Last week's sales

Wheat   350,000 - 450,000          424,400

Corn   800,000 - 1,100,000         726,200

Soybeans 500,000 - 750,000      715,000

Soymeal 100,000 - 200,000       125,000

Soyoil   50,000 - 65,000             13,500

Cotton   300,000 - 400,000          408,700



 

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.

 

 

Closing Grain Commentary July 7th

Jul 07, 2010

It was another wild day in the grain markets as corn, beans, and wheat all posted double digit gains. The main theme today seemed to be outside money flowing into the markets along with some unwinding of bull-spreads ahead of Friday's USDA report. This report will be issued by the USDA on Friday morning at 7:30am and will deal with Supply and Demand and wheat production. Also on Friday morning the USDA will release the weekly export sales numbers. These numbers are usually released on Thursday; however, due to the Fourth of July weekend they have been pushed back a day. We will release all of the trade estimates for both reports in tomorrow's commentary.

December corn settled 10 cents higher at $3.89 ¼. During the session we briefly traded up to the $3.90 level and ended up finishing the day just off the highs. As we have been discussing the corn complex still appears to be in a range bound trade with many producers looking to sell corn back up at the $3.90-$4.00 area. Today we issued a trade recommendation to take profits on the December $3.40 puts that we sold. If you were unable to get the order in please get in touch with your broker before tomorrow's open. Looking at the weather patterns for the next 6-10 days it appears that we will see good weather for a majority of the corn -belt and still experience no threatening patterns. As I mentioned earlier, the USDA will release a Supply and Demand report on Friday morning so it wouldn't surprise us to see more of this volatility heading into the report. If you need to catch up on cash sales or are looking for additional protection before Friday mornings report please give us a call.

Soybeans were the upside leader today as the November contract settled the day 32 ½ higher at $9.32 ½.  It appears that traders were concerned about the drop in crop ratings on last night's crop progress report. Our opinion is that the crop as a whole looks solid and we need to continue to monitor the weather as we move forward. It felt like outside money was also flowing into all three grains today and that was very prevalent in the bean market.  Going forward, we feel that producers that need to catch up on cash sales or hedge protection should be placing scaled up orders in at these to take advantage of this rally. It may go higher from here but having resting orders placed will allow the producer to take advantage of a continuing rally. Extended forecasts will always be constantly changing, in our opinion this is volatility that needs to be taken advantage of. For the producer that is worried about selling the grain in a rallying market there are call options to protect these sales. Please get in touch with your broker to discuss a strategy for your individual operation.

The wheat market had another solid performance today as the December contract for Chicago settled the day 23 ¾ cents higher at $5.59 ¼. There are stories being reported that Ukraine is experiencing dryness and this may have been a reason for some of the buying interest during today's session. In our opinion this worry may have been over-done. As I mentioned earlier weather patterns will constantly be changing and this will do nothing but add to the volatility and confusion in all three markets. The bottom line is, if a producer can sell grain at a profitable level they need to be taking advantage of this rally. For those producers that are able store wheat and sell deferred futures this has been a successful strategy. We realize that this may not be a strategy that all producers can put into place so please give us a call to discuss your individual operation.

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.

Closing Grain Commentary 7-1-10

Jul 01, 2010

 

Today the grain markets had another strong session as corn/wheat have follow-through buying from yesterday’s report. The USDA report is still the main driving factor behind this sharp rally. Dec Corn settled another 11 cents higher today at $3.84. Dec wheat was also sharply higher at $5.24 ¼.  The outside markets were conflicting with equities/energies weaker and the US dollar very weak.  Export sales for corn were 649,700 for this year and 76,500 for next (lower end of estimates.) 

 

The market was expecting the June USDA Corn Acreage to increase to 89.3 but to the surprise of the market it actually showed a decrease in acreage to 87.872.  This combined with a reduction in Corn stocks to 4.31 billion bushels (expected about 4.613) is the reason the market has rallied 40+ cents off of the lows on Tuesday.  Today was the first of the month/first of the quarter.  We are using this rally to rev up our sales for 2010 corn.  If you have not placed orders for the new recommendations please call your broker to discuss these strategies and how they pertain to your production. The forecast remains favorable for growing conditions. Dry weather is expected through the weekend with showers expected early next week for much of the Midwest.  Weather throughout the delta and also in China still needs to be monitored. 

 

The USDA report was mixed for beans as we saw a higher than expected acreage number but a lower than expected stocks number.  The November contract tested $9 again today but managed to rally back to settle at 905 ½.  In our opinion, the fundamentals remain bearish for soybeans and rallies should still be sold. With a large South American crop we could continue to see thin export sales.  If you are not caught up on sales and need to get orders placed, please give us a call to discuss the available strategies.

With the US Dollar down over 1000 today, wheat didn’t have much trouble staying sharply higher on the day. 

 

Today wheat finished up another 17 ¾ cents today at $5.24 ¼ December.  Wheat has been supported by the wheat/corn feed ratio. The USDA numbers showed higher acreage than expected as well as higher stocks than expected, suggesting a lower trade on normal trading days.  But with how cheap wheat has been compared with corn, this ratio kept wheat well supported over today and yesterday. Also, we have seen the basis improve tremendously for the soft red wheat.  This could be a result of the huge carry trade built into the market as everyone wants to hold cash wheat to store for future delivery.  We have seen strong export sales the last couple of weeks, another positive sign in a bearish market.  The recent corn break has been a large factor in wheat’s price drop.  If corn has follow-through buying from this report we could see wheat follow higher as well. From a producers standpoint if you are able to store your wheat, we feel selling deferred futures to capture the carry is a wise play in this market.

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Closing Grain Commentary 6-30-10

Jul 01, 2010

Another day of volatility in grains as the USDA report helped recoup much of the recent losses seen in corn and wheat. The report was the driving factor in today's trade, with corn showing some surprising numbers in acreage and stocks. The market was expecting the June USDA Corn Acreage to increase to 89.3 million, but to the surprise of the market it actually showed a decrease in acreage to 87.872 million. This, combined with a reduction in corn stocks to 4.31 billion bushels (expected about 4.613 billion), was the reason the market traded limit up in the first few minutes of trade. Corn did trade off-limit throughout the day, finishing 29½ cents higher (December) by the close. We came into this report on new contract lows in an oversold market; with numbers like these, the market was quick to bid up 30 cents. Tomorrow is the first of the month/first of the quarter. We could certainly see some follow-through buying in corn/wheat from today's action. We did not settle limit up, so we will not have expanded limits tomorrow. Also, there was a new recommendation today for 2010 corn, so please call your broker if you still need to place this order. The forecast remains favorable for growing conditions. 

The USDA report was mixed for beans, as we saw a higher than expected acreage number but a lower than expected stocks number. The market's initial reaction was bullish, as we saw November beans up 16½ cents in the first two minutes of trade. But the market quickly sold off, briefly trading below $9 again before settling at 902½ (November). There was heavy bull-spreading in the July/November bean spread, which was most likely a result of the lower stocks/higher acreage report. Also, today was the first notice day for July soybeans. In our opinion, the fundamentals remain bearish for soybeans and rallies should still be sold. With a large South American crop, we could continue to see thin export sales. If you are not caught up on sales and need to get orders placed, please give us a call to discuss the available strategies.

Wheat stuck to its recent trend of trading alongside corn today. Wheat was supported by the wheat/corn feed ratio. The USDA numbers showed higher acreage than expected as well as higher stocks than expected, suggesting a lower trade on normal trading days. But with how cheap wheat has been compared with corn, this ratio kept wheat well supported today. Also, we have seen the basis improve tremendously for the soft red wheat. This could be a result of the huge carry trade built into the market, as everyone wants to hold cash wheat to store for future delivery. We have seen strong export sales the last couple of weeks, another positive sign in a bearish market. The recent corn break has been a large factor in wheat's price drop. If corn has follow-through buying from this report, we could see wheat follow higher as well. From a producer's standpoint, if you are able to store your wheat, we feel selling deferred futures to capture the carry is a wise play in this market.

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 EHedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold EHedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.

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