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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 Grain Commentary 4/5/12

Apr 05, 2012

Old crop soybeans finished the day strong ahead of the long weekend.  May corn settled 1 ½ cents higher at $6.58 ¼, May soybeans 14 ½ cents higher at $14.34, and May wheat ¾ of a cent lower at $6.38 ½.

 

May soybeans finished at a new settlement high for the move.  Beans may be trying to take out their high of $14.56 which was made last September. The USDA Ag Attaché in Brazil lowered their production estimate by 2.5 million MTs down to 66.0 MMTs. November soybeans finished higher but weren’t able to find the same strength old crop soybeans had with such heavy bulls-spreading going on. Wheat continues to find weakness and is now trading at a 19.75 cent discount to corn again!  This seems to have kept old crop corn resisted over the past few days.  If we continue to see wheat trade at such steep discounts to corn we could see a lot more wheat feeding between now and the end of the summer.

 

The market is likely gearing up for the USDA report on Tuesday morning.  The important things to watch out for are old crop ending stock changes as well as South American corn and soybean production cuts.  The market is expecting the 2011/2012 soybean carryout to drop to 246 million bushels which is down almost 30 million from the March USDA estimate.  The average corn carryout is estimated at 721 million bu which is down from the last estimate of 801 million bushels.  These lower estimates continue to put a bullish tilt to the market.  Export sales were also favorable this morning adding to the strength.  Export sales ended up as follows.

                                 Estimated Range                         Old Crop            New Crop

Corn                         400,000 – 700,000 MTs                   937,600 MTs       185,100 MTs      

Soybeans                  600,000 – 850,000 MTs                   406,900 MTs       706,000 MTs

Wheat                      300,000 – 500,000 MTs                   408,300 MTs       103,400 MTs

 

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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. 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.

 

 

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