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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.

Closing Grain Commentary 8/23/10

Aug 23, 2010

Corn and beans were mixed today while wheat rallied.  December corn finished 3 ½, November soybeans finished up 1 ½, and December wheat finished up 13 ½.

Weekly export inspections this morning came back as expected for corn/wheat, and at the high end of trade guesses for soybeans. Today was a relatively quiet day compared to recent market activity. Outside markets were relatively stable as well with the dollar finishing up 165 and the S&P down 4.75. 

Tonight we may see some weakness in corn after they increased the crop condition rating today from 69 good-to-excellent up to 70. Many were expecting this to decrease not increase. Soybeans good-to-excellent rating decreased from 66 percent to 64 percent. Spring wheat is 53% harvested while the 5 year average is 60%.

The Commitment of Traders report shows that the funds are still heavy buyers in this market. The large speculator's net long position with futures and options increased by another 300,355,000 bushels to 1.853 Billion Bushels! For soybeans another 45 million bushels were bought in the beans alone not to mention similar increases in soy meal/oil. Just a reminder when the funds get this long there is a risk the price drops on liquidation. Even though the fundamentals may be bullish for corn these guys are already massively long. With that said, we do think corn has the tightest fundamentals but we don't like going into harvest unprotected. We are still working to buy corn calls on a break.

We recommend staying with current levels of protection (see hedge recommendations.) For those producers that need to get caught up on sales please call your broker to discuss current strategies.

 

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Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. 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 E Hedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold E Hedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.

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