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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.

Grains Hold Support to Start the Week

Sep 26, 2011

Grains finished stronger today, with corn leading the way. December corn finished 9½ cents higher at $6.48, November soybeans were up 1¾ cents at $12.59¾ and December wheat finished 7½ cents higher at $6.48¼. 

At some point, we are going to find support in these markets, but for the last month it seems that any rallies are quickly sold by the market. As we saw on the last Commitments of Traders report, the managed money has been liquidating grain positions. Have we priced these levels low enough where we could see the liquidation stop or even some fresh buying come in? Time will tell, but much of this will depend on the Sept. 30 Grain Stocks report as well as the October Supply and Demand Estimates report.

Being that it is Monday, we could have found some support on speculation that we would see a bullish weekly crop progress report. In fact, December corn has closed higher for the past seven Mondays in a row despite the weakness in grains recently. The report was as follows:

Corn                                                                Sept. 25                         Five-year average

Dented:                                                               96%                                        96%

Mature:                                                               63%                                        64%

Harvested:                                                          15%                                        16%

Condition:  Corn gained 1% from last week in the good-excellent category at 52%.

 

Soybeans                                                       Sept. 25                         Five-year average

Dropping Leaves:                                               58%                                        68%

Harvested:                                                         5%                                          11%

Condition: Soybeans were left unchanged from last week in the good-excellent category at 53%.

Corn, soybeans and wheat are all in oversold territory, so a slight rebound may be in order.  Between harvest pressure and supply bulls, this market can still remain choppy until we get more direction from Friday’s report. We can try to take advantage of the volatility by having hopeful orders below the market for upside call coverage, and orders above the market for anyone who needs more downside protection.  

Chart: December Corn

Chart: November Soybeans

 

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EHedger

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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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