Corn, beans, and wheat all closed higher to finish the month strong. The close marks a 10 ½ cent monthly gain for December corn, an 80 ¾ cents gain for November soybeans, and a 25 ½ cent monthly loss for wheat.
Export sales were strong for new crop corn and soybeans on this morning’s report with China taking the majority share in both products. The weather fears are still helping the market trend higher and soybeans have crossed above some major technical levels including the long term trendline resistance.
November Soybeans – (Red 50 Day MA, Blue 100 Day MA, Grey 200 Day MA, Green Trendline Resistance)
The preventive plant story is still the main market chatter but as we have said in previous letters we do not believe it will be a major supply disruptor at this time. What happens if we lose 3 million acres of corn? Three million acres at 92% harvest rate and a 160 national average yield is only 441 million bushels. The government currently has corn usage jumping 1.785 billion bushels from last year, mostly coming from feed. At current prices we don’t see a reason for usage to be much higher than last year especially with the cattle on feed numbers reported. A total production loss of 441 million bushels would not be astronomical by any means and this fear trade may be overdone.
There are rumors that the USDA might be planning to extend the prevent plant dates but again these are still only rumors. Producers need to carefully consider the financial impact of taking preventative planting and talk with their insurance agents. Basic prevent plant coverage only pays 60% of the guarantee and removes the possibility of receiving the harvest adjustment. If you are considering taking the prevent plant payment please call us immediately to discuss your options in detail.
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.