Jul 12, 2014
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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.

CBOT Prices Higher

Jul 09, 2013

It was another strong day at the CBOT with December corn leading the way.  The sharp rally started during the overnight session and accelerated after the midday GFS model was released.  The model has a high pressure ridge developing for much of the Midwest next week.  The changes to the midday model started the rally and the higher prices triggered some stop losses, extending the rally even further.  The forecast needs to be monitored closely but at this point the risk premium added may be on the high side again, especially with the upcoming WASDE report.

Thursday’s report will be significant for the fact that the USDA will be using the updated acreage estimates from the June 28th report.  The latest estimates have corn acres pegged at 97.379 million planted and 89.135 million harvested.  The June WASDE report had yield down to 156.5 bushels per acre due to the late planting.  If they leave yield unchanged total production should be 13.949 billion bushels, but there is a chance to see a higher yield since the crop ratings have been improving.  I have included the table of analyst estimates from the Reuter’s poll below.  The market expects corn carryout to be 1.896 billion bushels in the US.  Many of these estimates are using the USDA demand numbers which we still believe are too high given the current prices. It’s not that we believe it is impossible to reach these corn usage levels but it would have to be from a lower new crop corn price.  We still have to get through pollination with average weather but as we get closer to harvest the market should be working out more risk premium as it shifts its focus back to demand.  Many revenue insurance policies will start to kick in as prices get lower.  The idea is to at least get price protection from current prices down to whatever level the insurance will kick in.  This depends on your (or your County’s if using GRIP) yield.  Keeping a realistic estimate of where this level is may help you become a better marketer as you decide how much coverage you need in other areas of your marketing plan.  As always we don’t know what’s around the corner for weather and we want to make sure we will be OK in any yield or price scenario so going over these in AgYield is our number one recommendation.  Please contact us if you would like to see your current marketing plan in AgYield. Have a great week!

ANALYST ESTIMATES FOR THE JULY WASDE REPORT:

All Wheat Production

 

 

 

 

 

Average Est

Est Range

US 2012

 

All Wheat

2.070

2.015 - 2.140

2.3

 

 

 

 

 

 

USDA 2012/13 US Grain and Soybean Ending Stocks

 

 

 

Avg Analyst Est

Analyst Range

USDA June 2012/13 end-stocks est

Corn

0.725

0.537 - 0.800

0.769

 

Soybeans

0.121

0.104 - 0.135

0.125

 

 

 

 

 

 

USDA 2013/14 US Grain and Soybean Ending Stocks

 

 

 

Avg Analyst Est

Analyst Range

USDA June 2013/14 end-stocks est

Wheat

0.632

0.566 - 0.690

0.659

 

Corn

1.896

1.618 - 2.338

1.949

 

Soybeans

0.263

0.164 - 0.329

0.265

 

 

 

 

 

 

USDA World Production

 

 

 

 

 

June USDA 2012/13 est

May 2013/14 est

Argentina Corn

26.50

 

27.00

 

Brazil Corn

77.00

 

72.00

 

Argentina Soybeans

51.00

 

54.50

 

Brazil Soybeans

82.00

 

85.00

 

EHedger  |  866.433.4371
Premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.

EHedger is a premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may not place an order to buy or sell commodity futures contract by e-mail. 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 LLC, its affiliates, officers, directors, employees, or agents. EHedger LLC will not disclose anyone's position due to their confidential and proprietary nature. Recipients assume the risk of reliance on and indemnify and hold EHedger LLC harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information. The contents of this e-mail message and any attachments are intended solely for EHedger LLC's customers and brokers. This communication is intended to be and to remain confidential. Any duplication or distribution without the express written consent of EHedger LLC and this disclaimer is prohibited. If you are not an intended recipient of this message or if this message has been addressed to you in error, immediately alert the sender by reply e-mail and delete this message, its attachments, and any related messages from your computer and destroy any hard copies. If you are not an intended recipient or this message has been addressed to you in error, you are prohibited from delivering, distributing, disclosing, printing, copying, or relying on this message and/or any attachments. Opinions are solely those of the author and subject to change at any time, and are not a solicitation or recommendation to buy or sell commodity futures or commodity options. Past performance is not indicative of future results.


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