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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.

EHedger Closing Grain Commentary 4/9/2010

Apr 09, 2010
Market Settlement Change Low High 
May corn 345 3/4 -2 1/2 344 352
May wheat 465 3/4 -3 1/2 462.5 478.75
May beans 952 1/4 5 3/4 943.25 963.75
May soymeal 265.30 2.70 261.5 267.7
May soyoil 40.04 0.12 39.82 40.48
Apr live cattle 99.65 0.3 99.58 100.20
Apr lean hogs 76.225 -0.45 76.03 77.5

Thank you for all who attended this morning's webinar on the USDA report.  For those of you who were unable to attend we will be uploading it to our website shortly (www.ehedger.com) for your review.  Also, don’t forget that we have the March 31st USDA webinar available. You can review it by clicking on the icon found on the home page.
 
 
Grain posted a mixed session with corn and wheat closing lower, while old crop soybeans higher and new crop closed lower. For the week May corn was 1 cent higher, May wheat was 10 cents higher, May soybeans was 10 cents higher and Nov soybeans was 10 cents higher. The USDA will begin estimating corn planting pace next Monday. Much of the week’s trade was spent in the aftermath of the March 31st USDA report and in anticipation for todays supply/demand report. Below are the ending stock numbers from the report:
 
 
USDA
Ave. estimate
March
Corn
1.899
1.909
1.799
Soybeans
0.290
0.209
0.190
Wheat
0.950
1.001
1.001
 
 
Corn opened firmly, but closed in negative territory near session lows. The increase in ending stocks was a result of 100 million bushel reduction in the feeding demand. This follows our outlook due to feed competition from abundant wheat supplies, smaller animal numbers, and increased rations of DDG’s from the ethanol production. The estimated world corn carryout was 144.3 mmt vs. 140.3 previously. For the most part this report once again showcased growing stocks and without any spring weather problems it will continue make corn price rallies difficult. 
 
Soybeans had mixed outlooks from the report and thus traded in this fashion. The friendly surprise came from the ending stocks figure, which was left unchanged from the March report at 190 million bushels. Exports were increased by 25 mil bu, yet this was offset by a drop in residual. The fact that the ending stocks were left unchanged caused for immediate buying in the old crop/new crop spreads. July/Nov traded 7 cents higher to $0.25 today. While this number is friendly on paper the fact that world soybean stocks are a record should continue to weigh on prices, especially in the new crop. The estimated world soybean carryout is at 62.96 mmt vs. 60.67 previously. Soyoil and soymeal stocks were left unchanged from the previous report. 
 
Wheat finally saw a small reduction in the US and world ending stocks. USDA raised their estimate of US exports 40 million bushels and feed use 10 million bushels. Also, the world wheat ending stocks were lowered to 195.8 mmt v. 196.8 previously. Demand appears to have slightly picked up at these depressed prices, but it still must be noted that the supplies are abundant. It still looks attractive to store available wheat and sell forward into the market premium. 
 
Today’s report did not offer any real bullish themes for the weeks to come. Old crop soybean figures were friendly, but the massive South American crop along with our planted acreage will continue to pressure strength in the bean market. Fund buying, weather events, and outside markets may allow short term rallies to occur. We continue to believe that these need to be taken advantage of. Please call us if you have any questions.
 
 
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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.
 
 
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