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September 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.

EHedger Closing Grain Commentary 9/30/10

Sep 30, 2010

It was a wild day today after a surprise corn stocks number in the USDA report.  December corn traded as low as 26 ½ cents lower on the day before finishing down 9 ¼ at $4.95 ¾. Nov Beans finished up 7 ¾ and Dec wheat finished down 9 ½.

 

The USDA stocks report was the main reason for corn’s weakness today.  The average estimate for corn bushels was 1.407 and the actual came out to be 1.708.  That’s an extra 300 million bushel corn that was not expected.  Now obviously a lot of people are already attributing this to early harvest, but either way it puts a lot more importance on the October report.  An extra 300 million is equivalent to adding another 3.7 bushel onto this year’s crop.  The record longs will be really watching the October Supply and Demand report to decide what to do.   Expect a lot of volatility in the month of October.  Soybeans and wheat stocks came in as expected and were a non event.  Corn’s weakness pushed beans and wheat lower throughout the session but beans managed to hold strength and settle higher. 


Soybean yields continue to come in well over estimates with many 60-70+ bushel yields being reported.  Corn yields continue to come in extremely variable.  The market is waiting to see what the next 75% of the harvest brings, with the focus mainly on Iowa and Minnesota.

 

For those producers looking to catch up on the current recommendations, or if you would like additional coverage as we continue to progress through harvest, please get in touch with your broker.

 

 

 

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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.

 

 

EHedger Closing Grain Commentary

Sep 29, 2010
After a sharply a lower open to today's trading session the corn market rebounded to settle five cents higher in the December contract at $5.05. December Chicago wheat traded as much as twenty-one cents lower before a late rally caused the contract to settle the day down 1 ¼ cents at $6.83 ½. Soybeans lead the way sharply lower to start the day. At one point the November bean contract traded 26 ½ lower before finishing the day 11 cents lower at $10.99.
 
 
The last couple of days have provided solid rains for the Southeast and Delta growing regions.  Rains in the Southern Midwest helped ease concerns over not planting winter wheat.  Recent rains in Russia helped ease concerns over not planting wheat. The rains in South America helped ease concerns over not planting corn/beans.  Also the 10-day forecast is favorable for harvest progress in the US and we should see a rapid harvest pace during this timeframe.
Soybean yields continue to come in well over estimates with many 60-70+ bushel yields being reported.  Corn yields continue to come in extremely variable.  The market is waiting to see what the next 75% of the harvest brings, with the focus mainly on Iowa and Minnesota.
 
 
Tomorrow morning at 7:30am the USDA will release the weekly export sales for corn, beans, and wheat. In addition to the weekly sales numbers the USDA will also release the quarterly grains stocks and small grains summary. Below you will find the average trade estimates for both reports. Tomorrow morning we will have a detailed response to the USDA report in our EHedger morning and afternoon commentaries.
 
 
For those producers looking to catch up on the current recommendations, or if you would like additional coverage as we continue to progress through harvest, please get in touch with your broker.
 
 

letter 9/29



let2 9/29

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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.

 

EHedger Closing Grain Commentary 9/27/10

Sep 27, 2010

 

Corn fell sharply today after making new highs for the move in the overnight session. Beans were able to hold support. We are seeing a big unwinding of long corn/short bean spreads.

Today we came out with two new hedge recommendations for 2010 corn so be sure to check the updated hedge recommendations. 

Weekly grain inspections came in above expectations for beans, and in-line with estimates for corn/wheat.  This also helped beans hold support today.

Corn stats:  85% mature vs 65% for the 5-year average.  27% harvested vs 5-year average of 15%.   Corn condition is at 66% good to excellent compared to 68% last week and 68% this time last year.  The 10-year average good to excellent rating is 59%.

Soybean stats: 77% dropping leaves vs 72% for the 5-year average.  17% harvested vs 5-year average of 13%.  Soybean condition is unchanged from last week at 63% good to excellent and compares to 66% this time last year.  The 10-year average good to excellent rating is 55%.

Winter wheat is at 33% planted compared to the 5 year average of 38% this time of year.

I have included a crush chart below.  The price falling illustrates that demand for the products isn’t keeping pace with the soybean futures. This is probably a reflection of the huge inflows of investment money flowing into our markets.  The old/new option strategies recently recommended will help catch upside potential for these types of rallies.

Quantitative easing, selling of the dollar, and buying of treasuries and commodities have really been the main driving factor behind this rally.  It is just money chasing money at this point.  It makes grains more volatile and at the same time less likely to be sustainable at these prices.

Open interest continues to climb, we still haven’t hit record levels yet but we are close.  This week we will be at the end of the month/end of the quarter.  Many technical support levels still remain well below current prices so we recommend staying adequately hedged.  If you would like to get more protected please call your broker to discuss current strategies.

 

 

 

 

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.

 

EHedger Closing Grain Commentary 9/24/10

Sep 24, 2010

Grains rallied sharply today after Rueters reported that Calstrs (California State Teachers Retirement System) might be investing $2.5 billion in commodities over the next 3 years.  December corn finished 22 ½ cents higher at $5.21 ¾.  November beans finished up 32 ½ cents and December wheat finished up 22 ¾.

This strength was also attributed to strong outside markets after a strong manufacturing report which came out this morning before the open. Crude oil was up over a dollar higher and the US dollar hit new lows for the move.  The trend still remains bullish for corn/soybeans and with new money flow coming in like this it is going to be hard for the market to find resistance. 

I have included a crush chart below.  The price falling illustrates that demand for the products isn’t keeping pace with the soybean futures. This is probably a reflection of the huge inflows of investment money flowing into our markets.  The 2011 corn strategy we had put in place a couple of days ago will help catch upside potential for these types of rallies.   

Quantitative easing, selling of the dollar, and buying of treasuries and commodities have really been the main driving factor behind this rally.  It is just money chasing money at this point.  It makes grains more volatile and at the same time less likely to be sustainable at these prices.

Open interest continues to climb, we still haven’t hit record levels yet but we are close.  Next week we will be at the end of the month/end of the quarter.  Many technical support levels still remain well below current prices so we recommend staying adequately hedged.  If you would like to get more protected please call your broker to discuss current strategies.

 

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.

 

 

 


 

EHedger Closing Grain Commentary 9/23/10

Sep 23, 2010

Corn and wheat were lower today while beans continued to find support finishing five cents higher. December corn ended up settling the day 5 ¾ cents lower at $4.99 ¼. November beans settled for the day five cents higher at $10.93 ½. December wheat was the weakest contract on the board settling the day 22 ½ cents lower at $6.97 ¼. 

This morning the USDA released its weekly export sales numbers and we also had a Census Crush report. The weekly sales for corn were at the low end of the estimates at 561,000mt. Wheat sales were also at the low end of the range of trade estimates due to the cancellation of 490,500mt of 2011-2012 wheat. This brought the weekly sales to 459,800mt. Beans seem to have found continued support due to solid weekly sales at 1.08 million mt and also a slightly better than expected crush number of 128.1 million bushels versus the trade estimate of 127 million bushels.

The USDA also announced the sales of 120,000mt of US soybeans to China and also another 120,000mt of soybeans to an unknown buyer both for 2010-2011 delivery.  We need to be sure to keep in mind that Chinese demand has been pegged by the USDA at 55 Million MT’s this year.  This means on average they have to import 1.06 Million MT’s from either the U.S. or S. America every week to keep up with expected demand.

Open interest continues to climb.  Soybean’s open interest is about 550,000 contracts which is only 67,000 contracts away from its all-time high in February 2008.  Corn’s open interest is about 1.42 million contracts which compares to the all-time high of 1.546 million contracts in February 2007.  With such high open interest and a market largely supported by speculative investment we are likely to see volatility kept high.  The trend remains bullish for corn/soybeans.

Other commodities have been rallying right along with grains such as the metals and softs.  Gold posted a new all-time high yesterday at 1298 per ounce (December).

Tomorrow is the October option expiration for grains.  Much of the corn option open interest is at the $5 level and often times the market leans towards this area of high open interest heading into expiration.  Next week we will be at the end of the month/end of the quarter.  Many technical support levels still remain well below current prices so we recommend staying adequately hedged.  If you would like to get more protected please call your broker to discuss current strategies.

 

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.

 

EHedger Closing Grain Commentary 9/22/10

Sep 22, 2010

Grains had a mixed trade today but beans remain strong into the close.

 

Corn traded both sides of the market today before rallying along with soybeans in the last few minutes.  Soybean strength remained consistent for most of the day and had a strong push higher just before the close.

 

Another 226,000 MT’S of US soybeans were announced today for 2010-2011 delivery to China.  One thing to keep in mind is that Chinese demand has been pegged by the USDA at 55 Million MT’s this year.  This means on average they have to import 1.06 Million MT’s from either the U.S. or S. America every week to keep up with expected demand.

Open interest continues to climb.  Soybean’s open interest is about 550,000 contracts which is only 67,000 contracts away from its all-time high in February 2008.  Corn’s open interest is about 1.42 million contracts which compares to the all-time high of 1.546 million contracts in February 2007.  With such high open interest and a market largely supported by speculative investment we are likely to see volatility kept high.  The trend remains bullish for corn/soybeans.

 

Other commodities have been rallying right along with grains such as the metals and softs.  Gold posted a new all-time high today at 1298 per ounce (December).

 

Tomorrow morning we will have Weekly Exports and Census Crush. The crush is expected to be at 127 mill bushels with a range of 126.5-127.2.  Soyoil Stocks are expected to be 3.306 and meal stocks expected at 373.4.  Corn exports are expected between 550-800, beans between 450-650, and wheat between 400-700.  We will have results for both reports in tomorrow morning’s grain letter.

 

This Friday is the October option expiration for grains.  Much of the corn option open interest is at the $5 level which many times the market leans towards heading into expiration.  Next week we will be at the end of the month/end of the quarter.  Many technical support levels still remain well below current prices so we recommend staying adequately hedged.  If you would like to get more protected please call your broker to discuss current strategies.

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.

 

EHedger Closing Grain Commentary 9/21-10

Sep 21, 2010

Grains all finished lower today led down by wheat. 

Corn opened lower and after a two sided trade it found heavy selling into the close. Outside markets were a large influence today. Equities and crude oil were weaker going into the FOMC Minutes which came out just as the grain markets were closing. Basically the Fed kept the target rate at 0 - 0.25% and continued to say they would do whatever necessary to help the US economy if needed. The reaction to the Fed Minutes was very bearish for the US dollar which may give our markets a boost in the overnight session, however shortly after the decision Crude Oil dropped to the lows of the day.

The market remains at high open interest levels and supported by speculative investment. This has widened the basis so if you are able to lock in decent basis levels into the first part of next year it would be a good idea to reduce your risk of further basis changes. 

With only a billion bushel carryover for corn we can’t afford to lose much more in average yields. If yields remain unchanged from USDA’s September estimates the market is likely overbought. With only 18% of the corn crop harvested and %8 of the beans there are still a lot of unknowns in the market.

Yesterday’s December Corn high remains intact which is the 50% retracement level from the 2008 highs/2010 lows. With the market above $5 and at high open interest, the risks are higher in both directions, so expect volatility. We are approaching the end of the month/end of the quarter. Many technical support levels still remain well below current prices so we recommend staying adequately hedged. If you would like to get more protected please call your broker to discuss current strategies.

 
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.

EHedger Closing Grain Commentary 9/16/10

Sep 16, 2010

 

Headlines:
Markets overall weaker but corn managed to hold support and settle higher.
Egypt cancels 263,700 mts of US old crop wheat as well as 110,000 mts of US new crop wheat
This morning's export sales were below expectations for wheat and at the low end of the ranges for corn and beans.
Concerns about Canadian frost tonight.
 
December corn opened the day weaker but steadily rallied back towards the $5 level. Exports were at 587,900 mts which is at the low end of estimates. This on top of weaker outside markets kept corn weak for the morning session until rallying off its lows going into the afternoon trade. There were two new estimates of the Chinese corn production. CNGOIC estimated the Chinese national crop at 169 million mts (a new record). The other estimate was from JCI for 159 million mts, while the USDA is estimating 166, so obviously a wide range between the estimates.
Until the market is convinced that corn yields aren’t going down we should continue to see the market supported on any kind of setbacks. We are probably starting to ration some demand up at these levels but with only a billion bushel carryout we can’t afford the yields to go down much.
Soybeans traded lower today finishing 6 ¾ lower for November. The USDA announced the sale of 170,500 mts of US soybeans to China for 2010-2011 delivery. They also announced the sale of 67,000 mts of US soyoil to an unknown buyer for 2010-2011 delivery. Export sales were at 668,000 mts which is at the low end of estimates.  Soy meal export sales were actually negative 58,100 mts for this year which helped beans/meal’s weakness today. Canola futures rallied today on concerns of frost in Canada tonight.
Wheat was the downside leader after announcements of Egypt’s cancelled orders.  December Chicago Wheat was down as much as 15 ¼ cents a few minutes before the close but ended up down only 7 ½. This late rally came in meal as well and was likely due to the Canadian weather concerns.   
We are approaching the end of the month and end of the quarter. There is also a stocks report on Sept 30th. We could easily see profit taking going into this time frame so we recommend staying adequately hedged. We like staying with our current positions. If you need to get caught up on sales, or get additional protection, please call your broker to discuss current strategies.

 

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.

 

EHedger Closing Grain Commentary 9-15-10

Sep 15, 2010

Corn and soybeans close higher while wheat closes lower. 


The corn market continues to make new highs on high open interest.  We haven't been at this price level since October 2008.  Until the market is convinced that corn yields aren't going down we should continue to see the market supported on any kind of setbacks.  We are probably starting to ration some demand up at these levels but with only a billion bushel carryout we can't afford the yields to go down much.  Although we have seen some improvements in yield reports recently it will be imperative this trend continues.  We expected to see a lot more harvest pressure by this time but early yield reports have been mixed and the producer has been holding back from making sales.  Currently we are at severely overbought levels.  The first set of moving averages are over 30-50 cents below current prices.  Over a million Dec corn futures will be rolled between now and the middle of October. As we get to the end of the quarter and as harvest pace picks up, this could give us a correction in the corn market back to these moving averages 30 - 50 cents lower.   We are sticking with our hedges at this time. If you have any questions about our recommendations or would like to look at getting additional protection on as we progress through harvest please get in touch with your broker.

The soybean market largely depends on what the corn market does from here.  The corn/soybean ratio for the 2011/2012 crop year has gone from 2.36 in early August down to 2.19 today.  This reflects corns need to buy acres for next year.  In years where corn needs to buy a lot of acres this ratio can go to 2.0 or even lower, and we expect to see this for next year.  As this ratio approaches 2.0, it will be even harder for soybeans to break without corn breaking.  Early yield reports for beans have been very positive and it still appears in our opinion that beans have the most bearish fundamentals going forward, but again, look for corn to be a large influence either way.
Weekly sales come out tomorrow morning at 7:30.  Expectations range from 500-900 for corn, 400-800 for beans, and 700-1400 for wheat.  We will have actual sales in the morning letter.

It was reported yesterday that the Australian Bureau of Agricultural and Resource Economics (ABARE) revised its 2010-2011 wheat crop estimate from 22.138 mt to 25.09. This revised estimate helped follow through selling today as the world wheat supply fears fade a bit.  Wheat is still concerned about harvesting delays and quality concerns in Russia, Canada, and Europe.  Today is the last day for the crop insurance price to be set and it appears that the price is going to be right around $7.15. At this level it feels like we will have a strong increase of acres here in the US at these levels. We will also begin to look at futures and option strategies based on this guaranteed price so please get in touch with your broker to discuss these strategies.
 

 

 

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.

EHedger Closing Grain Commentary 9-14-10

Sep 14, 2010

It was another strong day in the corn market. After a sluggish start to the day corn settled the day 11 ½ cents higher for the December contract at $4.95. November beans finished the day 1 cent higher at $10.35. The wheat market struggled after news came out this morning from Australia that ABARE had raised their 2010-2011 wheat crop estimate from 22.138 mt to 25.09 mt. This caused the wheat market to settle nine cents lower for December Chicago wheat at $7.36.

 
The corn market continues to make new highs for the move based on disappointing early yield reports. The trend may continue if we do not begin to see better reports out of the northern parts of the corn-belt. Yesterday’s crop progress report showed 11 percent of the total crop as being harvested. We still have a ways to go and these levels appear to be solid places to catch up on sales. It is never a bad idea to place scaled up orders in at levels that would be profitable for your farm operation. There is no way to tell if the funds will continue to build on their already sizable long position. Basis levels have widened out and this may not get any better without a break in corn. It appears in our opinion that corn is trying to ration demand and buy acres. As I mentioned earlier, if the yields do not improve this may keep corn heavily supported. We are sticking with our hedges at this time. If you have any questions about our recommendations or would like to look at getting additional protection on as we progress through harvest please get on touch with your broker.
 
Today’s action in the bean market appeared to be driven by the dollar and the buying of commodities in general. Early yield reports for beans have been very positive and it still appears in our opinion that beans have the most bearish fundamentals going forward. If the bean yields continue to come back positively these are going to be levels that are good to be getting caught up on sales. As is the case with the corn market, if outside money continues to flow in a scaled up approach for sales would be wise. Please get in touch with your broker to discuss the best strategies for your individual operation.
 
As I mentioned earlier, this morning it was reported that the Australian Bureau of Agricultural and Resource Economics (ABARE) revised it 2010-2011 wheat crop estimate from 22.138 mt to 25.09. This revised estimate placed pressure on the wheat market for the entire session. Wheat is still concerned about harvesting delays and quality concerns in Russia, Canada, and Europe. The last day for the crop insurance price to be set is tomorrow and it appears that the price is going to be right around $7.15. At this level it feels like we will have a strong increase of acres here in the US at these levels. We will also begin to look at futures and option strategies based on this guaranteed price so please get in touch with your broker to discuss these strategies.
 
 
 
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 9/13/10

Sep 13, 2010

Grains closed higher again with corn continuing to make new highs for the move.

 
Corn has obviously been the upside leader, this will probably continue to be the one most supported on any sort of breaks. So far corn yields have been coming in mixed, but some of the latest reports have been overall better in the last week as many producers are getting to some of their better corn. Crop progress still shows only 11% harvested, which some were estimating to be 12-15%. Harvest will likely speed up at a rapid pace so we should start getting more results this week from the heart of the belt.
 
Bean yields continue to come in really well. That is why we have seen soybeans lose to corn and we expect this trend to continue. It wouldn’t surprise us to see corn yields come down and bean yields come up from the latest USDA report. Wheat is still concerned about harvesting delays and quality concerns in Canada/Europe.   Wheat’s price is also supported on uncertainty of planting delays in Russia and Ukraine. 
 
Weekly export inspections were at the high-end of estimates for corn, low-end of estimates for soybeans, and low-end of estimates for wheat. Corn and bean crop ratings both lost one percent in the good/excellent category. Corn did jump to 52% mature compared to the 5 year average of 32% mature.
 
Looking ahead we could see continued strength in corn. A lot depends on how much money the funds want to keep throwing into our markets, they are already at record longs. Having orders in above the market is a great way to get caught up on sales as the market figures out how far it has to go to ration demand. If the funds continue to buy the basis will likely continue to widen. For beans strong demand has to remain strong to keep the prices we have, otherwise we will probably be heading lower. Even though bean fundamentals remain bearish, more corn strength could be enough to hold beans supported.
 
For now we like to remain well protected (see hedge recommendations) and continue to monitor yield reports as we get through harvest. Please call your broker if you have any questions.
 
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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.
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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.

EHedger Closing Grain Commentary 9-9-10

Sep 09, 2010

Corn and wheat finished strong while beans finished slightly lower.

Coming into the day beans were sharply lower from the overnight markets after rumors of an investigation regarding illegal loans for soybean and rubber speculation in China.  The rumors were denied by China.

The markets held strong support from sale announcements as well as from stronger outside markets after Jobless claims fell more than expected today. Today was also the last day to position before tomorrow’s Supply and Demand Report. The USDA announced the sale of 60,000 MT’s of US Soyoil to China this morning.  They also announced the sale of 220,000 MT’s of US Hard Red Wheat to unknown destinations. Wheat basically gained everything it lost yesterday and then some.

Tomorrow’s USDA Supply and Demand report will be out at 7:30 am. We will release the numbers in tomorrow morning’s letter.  We have been talking about the emails floating around the marketplace of lower than expected corn yields. The market is obviously expecting to see lower corn/soybean production estimates (see report estimates below.)  The average guess for corn yield is expected to drop from the August USDA estimate of 165 to 163.1.  Soybean yield is expected to drop from the August USDA estimate of 44 down to 43.8.  With the market generally one-sided bullish, this could be a "buy the rumor - sell the fact" type of situation.  Even though we are bullish corn, we have already had a large move ahead of a big report. With record fund long positions, there is considerable risk of the price dropping if the funds start to liquidate.  We will have to wait and see what tomorrow’s report brings and how the market reacts.

The bottom line is to get protected while we have levels which are profitable for most producers.  It makes good business sense to secure prices when you know you can make a good return on investment.  Please call your broker if you need to get caught up to the latest EHedger recommendations.

 

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.

 

 

 

 

EHedger Closing Grain Commentary 9-8-10

Sep 08, 2010

It was a fairly uneventful day in the grain markets as everyone awaits the Supply and Demand report from the USDA on Friday morning at 7:30am. Corn and beans settled lower with December corn finishing 3 ¾ lower at $4.62 ½ while November beans were 3 ¼ lower at $10.48 ¾. The downside leader was Chicago wheat which settled the day 24 ½ lower in the December contract at $7.11.

This morning Stats Canada released a report that showed higher than expected stocks for Wheat and Canola. This contributed to the sell-off in the wheat market and helped push Canola six dollars lower. For the most part everyone is waiting to see what the USDA report will say and the markets will likely continue to chop around until we have this new data.  With only 6% of the corn crop harvested it is still hard to determine what the final yield will be.  We should have more accurate information this week after many producers will be deeper into harvest. I am still convinced that everyone is ready for a bad corn yield number on Friday.  These are levels that are profitable for most producers, in our opinion being adequately hedged at these levels is a good idea. (see hedge recommendations.)

This morning the USDA announced the sale of 115,000 mt of US Soybeans to China for 2010-2011 delivery. The bean market traded higher early in the session before finishing 3 ¼ cents lower. In our opinion the bean market is solid throughout the majority of the corn-belt. For those producers that need to catch up on sales these levels appear attractive to us. Please give your broker a call if you would like to look at strategies to protect these levels before the report on Friday.

 

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 9-7-10

Sep 07, 2010

A very choppy trade today after soybeans hit new highs for the move.  December corn finished up 1 ¾, November soybeans finished up 17, and December wheat finished down 6.

After the long weekend corn, wheat, and beans were all lower coming into the morning session.  The market saw heavy bull-spreading in corn / soybeans. November beans managed to surpass the 2010 high settling at $10.52.  Much of this is pre-positioning ahead of Friday’s report.

Weekly crop conditions were released today instead of yesterday due to the holiday. For corn we are down 1% in the good to excellent category at 69% good to excellent. Soybeans remain unchanged at 64% good to excellent.  Corn is at 33% mature compared to the 5 year average of 19%.

The STATS Canada report comes out tomorrow at 7:30 am, we will have those numbers in the morning letter. Today’s crop progress report shows corn at only 6% harvested (%4 is the 5 year average.)  The market has many "bad" yield reports flowing in, many coming out of areas which are just barely getting into harvest.  The much anticipated Supply and Demand report comes out Friday.  With only 6% harvested it is still hard to judge what the yield will be.  We should have more accurate information flow in this week after many producers get rolling. I am still convinced that everyone is ready for a bad corn yield number on Friday.  This is all the more reason to make sure you are adequately hedged while we are at profitable levels for many producers (see hedge recommendations.)

Today’s bean strength was partly attributed to the sale announcements totaling 90,000 MT of soy oil between Peru, China, and unknown buyers. Soybeans are also likely following corn’s strength. The continual buying everyday is too much for our markets to handle. With the funds holding record long positions in the grains, we are going to have too many futures and not enough grain at this time.

We like our hedges at this time.  Please call us if you would like to get caught up to our recommended levels of sales or would like to look at additional protection ahead of the report.

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.

 

EHedger Closing Grain Commentary 9/2/10

Sep 02, 2010

Corn/beans/wheat all settled higher after a slow trade today. Corn/soybeans were lower for most of the day before turning higher near the close.  December corn finished up ¾ of a cent at 447 ½ which is still slightly below the 2010 high of 4.49 ¾. November beans found support at $10 again before finishing up 3 ½ at $10.09.  December wheat was the upside leader finishing 5 cents higher at $7.13 ¾.

Today was a fairly quiet trade for most of the session. Exports this morning were solid for corn/wheat and on the low end of expectations for soybeans. Wheat was supported after Vladimir Putin announced the Russian wheat ban would be extended until the end of next year’s Russian wheat harvest.

Tomorrow we will likely remain choppy as some traders even up before the long weekend.  There is an unemployment report coming out tomorrow morning at 7:30.  Monday the grain markets are closed for Labor Day.

If you are looking to get extra protection ahead of next Friday’s report, there are some cheap ways to get short-term put protection to carry us through the report (please call your broker to discuss your options.)  We mentioned this report might not reflect a drop in corn yield/production even though many in the marketplace are expecting it to.

We have been getting yield reports out of the fields and they have been relatively 2 sided.  Some are so-so and some are excellent. The fact is the US corn crop is maturing very rapidly, and we should see a record amount of corn harvested in the next 30-45 days.  We believe this could put some strong downside pressure on the market during this timeframe.  Even though we are overall bullish corn, we don’t think now is the time to be outright long (should have adequate downside protection.)  With the marketplace holding near-record long positions and with a rapid harvest pace likely, we could easily trigger a larger sell-off than expected.  We like our current hedge positions at this time.

In our opinion we have a very solid bean crop. The yields that we have been hearing have come back better than expected. Coupling a strong bean crop in the United States and poor crush margins in China the bean market may continue to see pressure. We still feel very strongly that bean sales up at these levels are a good idea going into harvest. If you need to catch up on our current recommendations or would like to add additional protection as we progress into harvest, please get in touch with your 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.

 

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