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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.

Corn and soybeans sell off sharply 6/15/09

Jun 15, 2009
 
SETTLEMENTS 6/15
         
 
July 09 Corn
406
- 19 ½
Dec 09 Corn
427 ¾
- 20
July 09 Beans
1197
- 48 ½
Nov 09 Beans
1024 ¾
- 51 ¾
July 09 Wheat
575 ¼
- 9 ½
July 09 KC Wheat
631 ¾
- 5 ¼
July 09 Min Wheat
720
- 12 ½
July 09 Meal
405.3
- 17.4
July 09 Oil
36.62
- 0.54
 
 
 
 
 
 
 
 
 
 
 
 
 




 
Corn closed 20-cents lower, Soybeans closed 50-cents lower and wheat closed 10-cents lower.   NOPA crush came in at 142 million bushels, which was 5 million above estimates. This kept old crop beans supported early, but was not enough by mid-day. Planting progress came in around expectations with soybeans 87% planted. This compares with 83% last year and 92% average. Soybeans were rated 66% Good to Excellent versus 56% last year and 63% on average. Corn was rated 70% G/E versus 69% last year and 67% average. Wheat was 9% harvested versus 16% last year and 19% average. The outside markets closed sharply lower and the Dollar closed sharply higher.
With planting wrapping up in corn and soybeans and wheat harvest underway, our markets came under pressure today. Cattle and hog prices continue to collapse and this is pressuring corn and meal prices as well. Animal numbers continue to decline. Once hog and cattle numbers decline, it takes AT LEAST 9 months to start building those herds back up. So even if feeding margins came back tomorrow (and they’re not even close) and feeders decided to expand, it wouldn’t be until next year that we would see that feed demand pick back up for corn and soybeans. With record demand currently forecasted by the USDA, we should see those figures adjusted in the coming reports. Without the support of the outside markets, our markets could remain under pressure. Money can certainly continue to enter our markets, but in the end the fundamentals will determine price. 
The next major report will be the June 30th report. Both the stocks figures and planted acres will be important. With a tight situation expected in the old crop soybeans, the stocks figure will very important. Equally important for soybeans will be the acreage estimate. A lot of things have changed since the last USDA estimate and it will be important to see how the farmer has responded to these changes. If old crop soybeans continue to sell-off, new crop soybeans will start focusing on the acreage situation. With the possibility of an increase in acres, the soybean market could continue this break as we head into the report. The acreage estimate will also be important for the corn market. Weakening demand has caused the corn market to sell-off sharply in the past week. If this trend continues, I would still look to buy some additional calls before the report. The possibility of losing too many acres should help the corn market find support before the report. I would…
Wheat continues to break as we head through harvest. If corn and soybeans remain weak, we should continue to see wheat prices head south. Large global stocks and weak U.S. demand should continue to weigh on prices. If money continues to invest in commodities, we should continue to see 25-30 cent rallies. These rallies should continue to be sold at least for now. As a producer you should…  Please call if you have any questions.













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