Jul 11, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin


April 2012 Archive for 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 Afternoon Grain Commentary 4/30/12

Apr 30, 2012

Grains traded mixed to lower for most of the trading session until after 1 pm when they got a strong rally to close out the month.  July corn finished 8 ¾ cents higher at $6.34 ¼, July soybeans 12 cents higher at $15.05 ½, and July wheat 4 ½ cents higher at $6.54 ½. 

For the month July corn dropped 9 cents, July wheat dropped 19 ½ cents, and July soybeans gained 97 ¼ cents!  The "managed money" heavily reduced their net long corn position during this timeframe while slightly adding to their net long soybean position.  We also had favorable old crop sales for soybeans during this timeframe.  Corn had favorable sales data as well, but with the managed money liquidating approximately 50% of their net long position in corn which made it hard for corn to gain any ground.  There is also plenty of hedge pressure above these levels for new crop corn.  The May – July corn spread did take the market by surprise last week with a sharp rally to well over +20 cents!  When looking at flat price though, it obviously didn’t equate to July having a net positive month.

The market obviously started this week out positively but corn may find some resistance on the overnight session as crop progress was ahead of schedule again.  It looks like Iowa went from 9% planted last week to 50% planted this week!  Nationally corn is now 53% planted while the 5 year average is at 27%.  Soybeans are now 12% planted compared to 6% on average, and wheat is 54% headed with a 64% good-to-excellent crop rating.

Favorable rains fell widespread across the Midwest over the weekend bringing moisture to some much needed areas.  The forecast is calling for timely rains in the ten day forecast and overall favorable for moisture levels while providing a few dry pockets for more planting progress.  The bottom line is that weather is not an issue at this time for the majority of the Midwest.

For now we will continue to watch export sales and announcements for direction in these markets.  Today for example we received another sale announcement of 220,000 MTs of new crop soybeans to China and we rallied 19 cents in Nov beans.  We obviously can see that the funds have deleveraged corn and are still loaded up with long beans.  This will make getting out of that position interesting when the time comes I am sure. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!

November Soybeans

Nov Soybeans

www.ehedger.com/signup 

Best Regards, 

EHedger 

866-433-4371

www.EHedger.com 

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.

EHedger Afternoon Grain Commentary 4/27/12

Apr 27, 2012

It was another strong day for the old crop contracts with May corn leading the way!  May corn finished 29 cents higher at $6.53 while July corn finished 18 cents higher and is now 27 ½ cents discount to May!  July soybeans closed 13 ¼ cents higher while November closed 3 ¼ cents higher (new spread high again).  May wheat closed 16 ¼ cents higher at $6.42 ¼.

Monday is first notice day for May grain futures.  With spreads moving like they have the past few days I would think this volatility will continue right into delivery.  I have included a chart of May – July corn to show the massive rally it has made over the past two trading sessions.

Chart: May – July Corn

Corn Chart

The USDA announced heavy new crop corn sales this morning with an "unknown destination" buying 1.440 Million MTs!  China reportedly bought 120,000 MTs of old crop corn and 116,000 MTs of new crop soybeans.  Also another "unknown destination" bought 110,000 of new crop soybeans.

We continue to see export demand pick up and now it is flowing into new crop corn.  We will have to see how the flat price reacts during delivery next week.  Old crop soybeans continue to gain on new crop and are now trading July at a $1.31 ½ premium over November.  What is rather surprising is the market also has November soybeans trading at a 23 ½ cent premium to March 13!  The common theme with the money-flow is bullspreading!  Bullspreading has also helped push the July soybeans over $15 today which we haven’t seen front month beans trade above $15 since July 2008!  An interesting fact: in 2008 we only had 8 weeks total where FM beans were able to touch or trade above $15.00. 

Lastly I wanted to discuss the massive changes we saw on today’s Commitment of Traders report.  The "managed money" reportedly lowered their net long corn position by 43,511 contracts!  It is no wonder corn has had a hard time sustaining any strength!  They now stand with a net long position of 103,079 contracts of corn.  Soybeans added a meager 2,615 contracts to their net long position but stand with a massive 243,389 net long position!

For now we will continue to watch export sales and announcements for direction in these markets. We obviously can see that the funds have deleveraged corn and are still loaded up with long beans.  This will make getting out of that position interesting when the time comes I am sure. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great weekend!

www.ehedger.com/signup 

Best Regards, 

EHedger 

866-433-4371

www.EHedger.com 

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.

EHedger Afternoon Grain Commentary 4/26/12

Apr 26, 2012

Grains finished mixed with heavy "bullspreading" in corn, wheat, and soybeans.  The May – July corn spread gained 6 ½ cents today settling at +16 ½.  First notice for May corn will be on Monday and this spread is likely going to have some big swings next week.  July corn settled 6 ½ cents higher at $6.07 ½ and December corn actually finished 3 cents lower at $5.35.  July soybeans closed 4 ¼ cents higher at $14.80 ¼ and November closed 11 ¾ cents lower at $13.58 ¾.  This is a new settlement high for the July – Nov soybean spread and a new settlement high for July soybeans.  July wheat finished up 9 cents at a price of $6.35 ½.

The spread volatility continues!  Today’s strong old crop sales helped keep old crop supported despite being sharply lower for much of the morning session.  Weekly sales for 11/12 soybeans were 926,200 MTs which is a very large sales number for the end of April.  Most of the export business should be flowing to South America at this time of year.  Still this was somewhat anticipated by the market as we rallied the spreads sharply over the past 5 trading sessions.  Old crop corn sales were 645,600 MTs and 11/12 meal sales were 221,100 MTs.  Both of these numbers were strong.  There were also rumors of more corn and soybeans sold to china today which helped the spreads as well.

The bottom line is the recent demand influx is holding corn at current prices and pushing soybeans higher.  We know the funds are loaded up with record soybean long positions at the moment, can they continue to purchase at these levels?  New crop corn continues to get battered by hedge pressure and long liquidation.  Tomorrow is Friday and Monday is the last day of the month as well as first notice for May futures.  Look for a lot of volatility through this timeframe. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great weekend!

Chart: November Soybeans

NovSoybeans

Chart: December Corn

Dec Corn

www.ehedger.com/signup 

Best Regards, 

EHedger 

866-433-4371

www.EHedger.com 

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.

EHedger Afternoon Grain Commentary 4/25/12

Apr 25, 2012

Grains were wildly mixed today with large moves in the spreads.  Corn started the day strong but managed to close at the lows of the day at $6.01 for July (down 7 cents).  July wheat was down 6 cents at $6.26 ½.  July soybeans were sharply higher on the open but only finished 11 cents higher at $14.76.  This is a full 20 cents from the morning session high. In fact the November soybeans had the best close of the day finishing 18 ½ cents higher.  Part of this strength in the November contract may have been from large "bearspreading" activity in the July – Nov bean spread late in the day after making a fresh high this morning.

To start the day we were hearing rumors of massive Chinese old crop soybean purchasing.  The USDA did not announce any official sales for soybeans this morning but they did announce a number of corn sales.  They announced 90,000 MTs of old crop corn to China, 172,000 new crop corn to China, and another 420,000 MTs of new crop corn to "unknown".  Despite these sale announcements corn was unable to hold the strength it found on the opening and quickly made its way lower.

Ethanol production was down from last week but stocks were lower as well. Crude oil traded lower early and helped spur the weakness in corn.  There was an article out earlier about Iran possibly halting their nuclear expansion to escape the oil sanctions.  This helped ease some oil supply concerns.

Export sales will be released tomorrow and will be watched closely at this time of the year and at the current estimated export demand.  The average analyst estimates for the report are as follows:

Corn:                                  550,000 – 1,000,000 MTs

Soybeans:                           800,000 – 1,300,000 MTs

Wheat:                               350,000 – 700,000 MTs

It appears yesterday’s "mad-cow" scare has not picked up much speed.  One Korean grocer did announce that they would halt the sale of US beef until further notice of its safety from their government.  Livestock futures were higher today after yesterday’s "limit-down" move.

We have had two days of strong corn sale announcements and corn can’t seem to catch any strength.  It may have been that these sales were less than what was rumored, but this is still not a great sign for price action.  We will have to see what effect the export sales report will have on price tomorrow morning.

The last point I want to make is that this is only April and we are seeing a lot of volatility in our markets.   We could see this continue right into the summer.  For now we want to remain with the current Ehedger recommendations.  To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!

Chart: November Soybeans

Nov Soybeans

Chart: December Corn

Dec Corn

Chart: December Wheat

Dec Wheat

www.ehedger.com/signup 

Best Regards, 

EHedger 

866-433-4371

www.EHedger.com 

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.

EHedger Afternoon Grain Commentary 4/23/12

Apr 23, 2012

Corn and wheat finished strong today while soybeans sold off.  May corn closed 10 cents higher at $6.22 ½, May wheat 9 ¼ cents higher at $6.25, and May soybeans 9 ½ cents lower at $14.37 ¼.

The rumor mill continues with more stories of China buying old crop corn.  On Friday we had rumors of Brazil slowing/stopping soybean exports but they quickly denounced these as false.  Colder weather in the forecast also played a role in today’s corn and wheat strength.  Weekly export inspections were only 12.005 million bu for soybeans compared to the expectations at 22.5.  Corn export inspections were 29.386 (34.5 expected) and wheat was 24.391 (21.5 expected).

Weekly Crop Progress showed corn at 28 percent planted vs the 5-year average of 15 percent.  Illinois is now 59% planted compared to 17% on average!  Overall the corn crop is 9% emerged compared to 2% on average.

Soybean planting progress is at 6% complete which is above the 5-year average of 2%.  Winter wheat is 42% headed compared to 15% on average.  Winter wheat crop condition lost 1% in the good-excellent category but is still at 63%.  Spring wheat is way ahead of schedule at 58% planted compared to 19% on average.   I didn’t see enough changes on this report to have any major market moves on the overnight open from this.

One important thing to watch is the spread between July – November soybeans.  We did see more old-crop soybean sales to "unknown destinations" this morning before the open which helped that spread trade back above $1.00.  This spread gained ground despite the sell-off in the flat price.  We will have to continue to watch exports and crush for direction in this spread.  Tomorrow morning we will have the STATS Canada report out before the market opens.  To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!

www.ehedger.com/signup 

Best Regards, 

EHedger 

866-433-4371

www.EHedger.com 

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.

EHedger Afternoon Grain Commentary 4/20/2012

Apr 20, 2012

Grains had some massive moves today with soybeans sharply higher and corn/wheat sharply lower.  May soybeans finished 31 cents higher at $14.16 ¾!  This is 7 ¼ cents below the last screen traded price.  May corn settled 9 cents lower at $6.12 ½, and May wheat 9 cents lower at $6.15 ¾.

Why the strength in beans?  For one it was option expiration and we ran "into-the-money" on the $14.30, $14.40, and $14.50 strikes for a total call OI of 15,601 contracts.  The front month soybean contracts had the largest rallies.  The July – November spread was particularly strong after it surpassed its September 2011 high of 83 ½ cents, it quickly rallied its way up to $1.00 (see chart)!  Besides these technical reasons for the rally, we also had rumors of Brazil pulling soybean offers.  This is a little hard to believe as soybeans just made fresh highs today in Brazilian Reals.  They are making plenty of money at these levels and for them to be pulling offers it would be for very serious supply reasons.  If we get confirmation of this before Sunday night we should be sharply higher on the opening.  If they turn around and deny this rumor, we could see a retracement. This reminds me of the Chinese corn purchasing rumors, more of the rumor mill. It could be they are just looking for potential reasons to explain this massive technical move on a Friday which is also option expiration day.

Corn was the opposite today with heavy "bearspreading".  It almost looks like someone or fund was heavily bullspread corn and bearspread soybeans and is blowing out of positions.  We will have to see what open interest does on Monday morning, but this is a possible answer to these moves.  Today’s Commitment of Traders report showed a HUGE drop in net longs for the "managed money".  They reduced their net long position by 47,242 contracts bringing them to a net long of only 146,590!  The "managed money" left their soybean position mostly unchanged only reducing the massive net long position by 1899 contracts and still holding a net long of 240,774 contracts!  That’s 1.642 long soybeans for every long corn!

Cattle-on-Feed was very neutral and won’t likely be a major mover for next week.  We will have to watch the headlines over the weekend for Sunday night / Monday direction.  For now we like staying with the current EHedger recommendations.  To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great weekend! 

Chart: July-Nov Soybean spread (Daily)

 Chart: July-Nov Soybean spread (Weekly)

 

 

Chart: Novemer Soybeans 

 

 

Chart: December Corn

 

 

 

www.ehedger.com/signup 

Best Regards, 

EHedger 

866-433-4371

www.EHedger.com 

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. 

EHedger Afternoon Grain Commentary 4/19/12

Apr 19, 2012

Grains reversed off their lows from yesterday to trade sharply higher today.  May corn lead the way finishing 19 ¼ cents higher at $6.21.  May soybeans finished 8 cents higher at $14.15 ¾, and May wheat 14 cents higher at $6.24 ¾.

Overnight the markets steadily traded higher.  Concerns over the quality of EU sourced corn have slowed/stopped Japan from purchasing European/Ukrainian old crop corn.  This helped fuel a rally in our markets as demand could pick up for US corn.  Corn export sales were rather poor with new crop actually seeing a negative 2,400 MTs.  Wheat export sales were a little below expectations and soybeans, soymeal, and soyoil were all strong.

                             Estimated Range                          Old Crop            New Crop

Corn                    700,000 – 950,000 MTs                  300,700 MTs       -2,400 MTs

Soybeans             850,000 – 1,100,000 MTs               374,300 MTs       845,000 MTs

Wheat                 450,000 – 650,000 MTs                  365,900 MTs       76,300 MTs

Soybean Meal       75,000 – 150,000 MTs                    300,800 MTs       1,500 MTs

Soybean Oil          0 – 20,000 MTs                              23,900 MTs         0 MTs

 

The funds were estimated heavy buyers of corn today as we have fresh rumors of China purchasing corn.  The rumor mill did not say whether this was old crop or new crop.  The fact that the price of corn and more specifically old crop corn has been hammered over the past week helped make this rally a little stronger.  Soybeans were strong from the start but dropped all the way to negative territory during the midday session.  Even with these massive "flat-price" intra-day moves the July – November bean spread stayed supported all day.  November soybeans are right at their long-term trendline support level (see chart).  If they hold support here we may see the price try to head back towards $14.  If not this would be the first time they break the upward trend since it started back in December and may be a signal for a downside corrective move.

 

Chart: November Soybeans

Nov Soybeans

 

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

 

 

EHedger Grain Commentary 4/18/12

Apr 18, 2012

Grains finished lower with soybeans having the largest move.  May corn finished 15 cents lower at $6.01 ¾, May soybeans down 18 cents at $14.07 ¾, and May wheat down 4 ¾ cents at $6.10 ¾.

Ethanol production was down slightly while the ethanol stocks stabilized helping to add to the corn weakness.  Crude oil also had a large selloff today. The old crop / new crop corn spreads were sharply lower for the second day in a row.  Open interest in May and July corn dropped a combined 10,574 contracts and increased by 5,227 contracts for December. This suggests the large 2-day break in corn spreads has been a combination of liquidation and rolling positions from old to new crop.  I have included a chart of the July – Dec corn spread with the USDA report dates to show some of the recent moves.

Chart: July – December Corn

Corn Chart

Soybean spreads on the other hand continue to remain near the recent highs despite the selloff in the flat price.  July – November soybeans finished down ¼ cent at +75 ¾ cents.  The USDA announced another sale of 120,000 MTs of new crop soybeans to China this morning.  Tomorrow morning we will have the Weekly Export Sales report at 7:30 CST.  The estimates are as follows:

Corn                                  700,000 – 950,000 MTs

Soybeans                           850,000 – 1,100,000 MTs

Wheat                               450,000 – 650,000 MTs

 

May corn option expiration is still a concern as more and more of these puts get "into-the-money".  As I discussed yesterday, there is a massive amount of open interest in the May $6.50 corn puts all the way down to the $6.00 puts.  The last major strike level in sight for corn is $6.00 so this may be place where we find support.

 

For now we want to stay with the current EHedger recommendations. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!

 

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

 

EHedger Grain Commentary 4/17/12

Apr 17, 2012

Grains finished mixed with weakness in the old crop corn contracts.  May corn settled 6 ½ cents lower at $6.16 ¾ cents while December corn finished 3 ½ cents at $5.29 ¾.  May soybeans finished 5 ¾ cents higher at $14.25 ¾ and May wheat settled ¾ of a cent lower at $6.15 ½.

Old crop corn is under the most pressure as the early planting has the potential to replenish supply early.  Crop progress was expected to come out between 20 – 25 percent planted for corn but they came in below expectations at 17 percent on the 3pm crop progress report.  This is still a record pace for corn planting.  Everything is ahead of schedule with the weather we have had.  Winter wheat is 29% headed (average 8% at this time of year), oats 76% planted (48% on average), rice is 56% planted (29% on average), and spring wheat is 37% planted (9% is the average).

With corn’s planting pace below the market estimates this may be slightly bullish on the open tonight, especially after a large break in the spreads.  Since the April 10th WASDE report, May corn has dropped by 32 ¼ cents and May soybeans by 5 ¼ cents.  The Sept – Dec corn spread went from a high of 38 ½ cents on March 14th to today’s low settlement of 11 ¾ cents.  A large part of this has been market sentiment coinciding with what the USDA has expressed: early planting has the potential to replenish enough supply in this time frame.

Soybeans were the strong market today with more bull-spreading in the July – Nov contracts.  Today that spread settled at +76 cents. We will continue to watch the export sales reports as well as crush reports for direction of old crop soybeans.  The funds are loaded up with record long soybean positions and soybeans have a record open interest.  If demand falls off or we gain a significant amount of bean acres added we could see a sharp sell-off in this market.

As I said yesterday, May option expiration could be contributing to some extra weakness as option writers sell futures to cover short puts.  May grain options will go off the board on Friday and the corn put open interest is high at the $6.50, $6.40, $6.30, and $6.20 levels with a combined 51,386 puts just in those 4 put strikes alone.  Another 22,974 puts are at the $6.15 - $6.00 strikes and pressure below these levels could continue to add to the weakness.

 

For now we want to stay with the current EHedger recommendations. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!

 

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

 

EHedger Grain Commentary 4/16/12

Apr 16, 2012

Grains finished lower to start the week.  May corn settled 6 cents lower at $6.23 ¼, May soybeans 16 ¾ cents lower at $14.20, and May wheat 7 ¼ cents lower at $6.16 ¼.

 

Corn continues to get pressure from the favorable planting conditions across the Midwest.  Planting progress was expected to come in at 20-25% complete for corn and 2% for soybeans but we won’t get those estimates today due to a fire at the USDA in Washington.  This also kept the market from receiving the weekly export inspections which are usually released on Monday’s at 10:00 am.  We will have both of these reports for you as they become available.

 

Some of the soybean weakness today could be attributed to the Nopa crush data which was released this morning.  Crush came in slightly below estimates while the oil stocks were slightly above the average guess. Still neither of these numbers were far from the average guesses so this was more likely money flow from profit taking.

 

May option expiration may also be contributing to some extra weakness as option writers sell futures to cover short puts.  May grain options will go off the board on Friday and the corn put open interest is high at the $6.50, $6.40, and $6.30 levels with a combined 43,066 puts just in those three put strikes alone.

 

For now we want to stay with the current EHedger recommendations. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!

 

December Corn

Dec Corn

November Soybeans

Nov Soybeans

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

 

EHedger Afternoon Grain Commentary 4/13/2012

Apr 13, 2012

It was another choppy day for grains with corn, wheat, and beans all finishing lower.  The one market that finished stronger and has been an upside leader lately is May soymeal.  December corn finished 9 ¾ cents lower at $5.37, July wheat down 14 ¼ cents at $6.30 ¼, and November soybeans down 11 cents at $13.61 ¾. 

For the week, May corn finished 29 cents lower while May soybeans finished 2 ¾ cents higher.  The July – November soybean spread was very strong again trading all the way up to an 81.5 cent premium!  The market may be preparing for the Nopa Crush report on Monday morning.  Otherwise the overall market tone was very negative today with wheat leading the way lower.  The US Dollar reversed all of its losses from yesterday and is now trading back above 80.0.  Equities and commodities in general traded sharply lower especially after some poor Chinese economic data was released.

 

For Monday the estimates for Nopa crush are between 141.5 – 143.8 million bushels.  This compares to 134.4 at this time last year.  Soyoil stocks are expected to be between 2.338 to 2.360 billion lbs compared to 2.242 last month.  Monday we will also get crop progress data to show us how much corn we have planted already. 

 

Between now and June the market won’t have a definitive answer of just how many acres switch back to soybeans from corn.  There is plenty of hedging waiting to get done above these levels for corn which is keeping December resisted.  The most resistance may be found above the insurance level of $5.68.  Soybean direction should be extra sensitive to crush and export numbers from here until the next stocks report as the market seems wired to buy it.  The "managed money" is holding a massive net long position of 242,673 contracts!!!  That’s 1.213 billion bushels of net long positions using futures and options. If we see exports stay strong until September they could keep taking beans higher. If we see cancellations or sales rolled to new crop, it would be very bearish with such a large spec position in these months.  We will have to continue to monitor these numbers for direction. 

 

Now is still a great time to double check your 2012 hedge strategy using AMMO to see if there are any changes to be made.  To receive a trial of the AMMO software, please sign up using the link below.  If you would like to open a hedge account at EHedger, please contact Dustin or Dan at 866-433-4371.  www.ammoag.com/signup .  Have a great weekend!

 

 

 www.ehedger.com/signup/


Best Regards,
EHedger
866-433-4371
www.EHedger.com

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.

Ehedger Grain Commentary 4/12/12

Apr 12, 2012

Grains finished stronger with old crop soybeans leading the way.  May soybeans settled 19 cents higher at $14.41, May corn 1 ½ cents higher at $6.37 ½, and May wheat 11 ¼ cents higher at $6.39 ¼.

 

Weekly export sales data was actually weak for soybeans and strong for corn.  The majority of the corn sales were to Mexico and "unknown destinations".  The USDA did announce some bean sales to China and unknown destinations before the day session began which were separate from the weekly sales report.  The market continues to bid up old crop soybeans and July beans settled at a new high close going back to September 2011.  The July – November soybean spread has really picked up speed and is now trading at +71 ¾ cents which is also a new high for the move (see chart).

 

Chart: July – November Soybeans

Soybean Chart

 

The other strong factor today was the US dollar trading lower.  The June Dollar futures dropped 0.510 to 79.480 as of 4 pm today which helped commodities and equities across the board.

 

Weekly Export Sales Results:

 

                                Estimated Range                    2011/2012         2012/2013

Corn                      400,000 – 850,000 MTs               959,100 MTs       16,700 MTs

Soybeans               700,000 – 1,150,000 MTs            460,100 MTs       176,300 MTs

Wheat                   350,000 – 650,000 MTs               452,100 MTs       90,400 MTs

 

Between now and June the market won’t have a definitive answer of just how many acres switch back to soybeans from corn.  There is plenty of hedging waiting to get done above these levels for corn which is keeping December resisted.  The most resistance may be found above the insurance level of $5.68.  With strong sales and stronger ethanol numbers with week, we may find old crop corn gains back some of its ground it has lost to soybeans in the short run.  Soybean direction should be extra sensitive to crush and export numbers from here until the next stocks report as the market seems wired to buy it.  The "managed money" is holding a massive net long position which was increased by a full 25,000+ net contracts on the last COT report.  If we see exports stay strong until September they could keep taking beans higher. If we see cancellations or sales rolled to new crop, it would be very bearish with such a large spec position in these months.  We will have to continue to monitor these numbers for direction.

 

Now is still a great time to double check your 2012 hedge strategy using AMMO to see if there are any changes to be made.  To receive a trial of the AMMO software, please sign up using the link below.  If you would like to open a hedge account at EHedger, please contact Dustin or Dan at 866-433-4371.  www.ammoag.com/signup

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

EHedger Grain Commentary 4/10/12

Apr 10, 2012

It was a weak day at the Chicago Board of Trade with double digit losses in old crop corn, new crop soybeans, and old/new crop wheat.

 

The prime reason for the corn selloff was the USDA monthly Supply and Demand report.  The market was expecting the USDA to lower their forecasted 2011-2012 corn carryout to 721 million bu.  To the market’s surprise the USDA didn’t change a single US corn demand number, leaving it untouched from the March report at 801 million bu.  The world corn carryout fell almost 2 MMTs to 122.7 MMTs which is just above market expectations.

 

The US and World soybean estimates fell right in-line with market expectations.  Combined soybean production between Argentina and Brazil was lowered to 111 MMTs and total world carryout is estimated at 55.52 MMTs.  These estimates helped beans open up and trade to new highs for the move (May contract).  Even though beans couldn’t hold that strength and ended up having a 30 cent selloff from the highs, the July – November bean spread still closed 9 ¼ cents higher.

 

Wheat was a little harder to figure out today as total World Carryout was a full 2 MMTs below estimates yet it had the largest selloff.  The world wheat feeding estimate jumped 6.83 MMTs from the March estimate!  This shows a lot of what we have been discussing about wheat being cheap to corn.  Even in the US they increased wheat feeding by 35 million bu.  Yesterday’s sharp increase in the winter wheat crop rating could have played a part in the selloff as well as the fact that harvest will be just around the corner.

 

Between now and June the market won’t have a definitive answer of just how many acres switch back to soybeans from corn.  A carryout of only 250 mill bu is obviously small but we will have to continue to watch weekly sales and exports to see if they line up with the USDA’s projections. Now is still a great time to double check your 2012 hedge strategy using AMMO to see if there are any changes to be made.  To receive a trial of the AMMO software, please sign up using the link below.  If you would like to open a hedge account at EHedger, please contact Dustin or Dan at 866-433-4371.  Have a great rest of the week!

 

USDA APRIL SUPPLY AND DEMAND SNAPSHOTUSDA Chart

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

EHedger Grain Commentary 4/9/12

Apr 09, 2012

Old crop corn ended the day sharply lower which looks to be position squaring ahead of tomorrow’s USDA Supply and Demand report.  May corn finished 9 ¼ cents lower at $6.49 while December corn finished unchanged at $5.50 ¼.  May soybeans finished 3 cents lower and may wheat finished 4 ½ cents higher.

 

With the July-Dec corn spread dropping 11 cents today, the market is obviously a little wary of heading into the USDA report with a full dollar premium in old-crop corn over new-crop.  Wheat on the other hand had a relatively strong day, retracing some of its recent losses to corn.

 

The Weekly Crop Progress report shows corn at 7% planted which is well ahead of the 2% - 5 year average.  Illinois alone is at 17% planted compared to the 1% - 5 year average.  Spring wheat is also ahead of schedule at 21% (5 year average is 5%).  Winter wheat conditions improved week-over-week by 3% in the good-excellent category.  Wheat is now 61% good-excellent while at this time last year it was only 36%!

 

Tomorrow’s Supply and Demand report will give us Old Crop carryout estimates as well as South American production.  The quarterly stocks report showed a larger than expected drawdown in old crop corn stocks and will likely reduce their carryout estimates to reflect this.  The average estimate for corn carryout is 721 million bushels (March USDA Est – 801 million).  The average estimate for soybean carryout is 246 million bushels (March USDA Est – 275 million).  The average estimate for wheat carryout is 792 million bushels (March USDA Est – 825 million).

 

The market is also estimating across the board reductions for corn and soybean production in both Argentina and Brazil.  Last week the USDA Ag Attaché lowered their Brazilian soybean estimate to 66 million MTs (down 2.5 million).  The question remains: will the updated figures in tomorrow’s report be low enough to be considered bullish?

 

EHedger is a full service brokerage firm located in the Chicago suburbs.  If you would like to receive two weeks of the EHedger research absolutely free, please sign up using the link below.  Please contact Dustin or Dan at 866-433-4371 if you would like to discuss opening a hedge account.  Thanks and have a great week!

 

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

 

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

 

If you would like to sign up for an EHedger account, get a free trial of our research, or would just like more information about our services please sign up using the link below.  Have a great weekend and Happy Easter!

 

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

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.

 

 

EHedger Grain Commentary 4/3/2012

Apr 03, 2012

Grains finished mixed today with large trading ranges.  May corn finished 3 ¼ cents higher at $6.58 ¼, May soybeans down 4 ¼ at $14.16 ¾, and May wheat finished a penny higher at $6.58.

 

Soybeans came in from the overnight session weaker and rallied sharply within the first hour of trading.  Towards the end of the day the spreads started to sell off bringing soybeans down to the day session lows.  Part of the selloff was associated with the Feds decision NOT to add any more easing measures at this time.  When the news broke at around 1 pm we saw a rise in the US dollar and a fall in many dollar denominated assets (stocks/commodities).

 

Today’s market fundamentals weren’t of much significance to change the overall tone of the market.  November soybeans were very close to reaching $14 but quickly sold off.  The $14 level for November beans was a hard ceiling last September before falling all the way back down to the low of $11.34 ¾ in December.  Now that we have retraced almost a full 100% you may find the market seeing this level as a good place to take some money off the table again, but we will see.

 

USDA Report:

Friday's USDA report showed a decline in old crop corn supply which is helping May corn stay supported at $1.10 above December. They didn't find a large drawdown in soybean supply although the market was surprised with a much lower soybean acreage number than expected. So far November soybeans have received the largest rally from this report. We saw soybean open interest jump 31,000+ contracts on Friday and another +21,000 on Monday which means new money has been flowing into beans. With the new crop corn-bean ratio now trading above 2.50, more areas may plant soybeans where possible. We have to remember that the planting intentions were as of March 1st. The fact that we won't see the next acreage number until June may help keep soybeans supported to other markets like new crop corn until then. The next major resistance level should still be at $14 (November). For December corn the 50 and 100 day moving averages are at $5.63 and $5.6325 which may be the next areas of resistance. 

 

Friday the markets will be closed in observance of Good Friday and reopen for the Sunday night trading session.  We like staying with the current EHedger recommendations.  If you would like to receive a free trial of the EHedger research including hedge recommendations, please sign up with the link below.  Have a great week!

November Soybeans

Soybean Chart

 

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

 

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.

 

EHedger Grain Commentary 4/2/2012

Apr 02, 2012

Grains had some follow through trading from Friday’s report as we saw heavy "bull-spreading" in corn and "bear-spreading" in soybeans.  Wheat was trading sharply lower for most of the day but rallied in the last few minutes to finish only 3 ¾ cents lower.  May corn closed 11 cents higher at $6.55 and May soybeans 18 cents higher at $14.21.

Friday’s USDA report showed a decline in old crop corn supply which is helping May corn stay supported at $1.10 above December.  They didn’t find a large drawdown in soybean supply although the market was surprised with a much lower soybean acreage number than expected.  So far November soybeans have received the largest rally from this report finishing 80.5 cents higher today than where they were on Thursday.  We saw soybean open interest jump 31,000+ contracts on Friday alone which means new money is flowing into beans.  With the new crop corn-bean ratio now trading at 2.54 to 1, more areas may plant soybeans where possible.  We have to remember that the planting intentions were as of March 1st.  The fact that we won’t see the next acreage number until June may help keep soybeans supported to other markets like new crop corn until then.  The next major resistance level should be at $14 (November) as we touched that level multiple times last September and fell from there.  For December corn the 50 and 100 day moving averages are at $5.63 and $5.64 which may be the next areas of resistance.

Friday the markets will be closed in observance of Good Friday and reopen for the Sunday night trading session.  We like staying with the current EHedger recommendations.  If you would like to receive a free trial of the EHedger research including hedge recommendations, please sign up with the link below.  Have a great week!

November Soybeans

November Soybeans

December Corn

December Corn

www.ehedger.com/signup

Best Regards,

EHedger

866-433-4371

www.EHedger.com

 

 

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.

Log In or Sign Up to comment

COMMENTS

Legacy Newsletter
 

Follow Us

Facebook Twitter You Tube
 

Hot Links & Cool Tools

    •  
    •  
    •  
    •  
    •  
    •  
    •  

facebook twitter youtube View More>>
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions