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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 Afternoon Grain Commentary 1/30/13

Jan 30, 2013

March Soybeans closed up 27 cents at $14.78 ¾, just below the 100 day moving average of $14.80.  March soybeans have not closed above the 100 day since November 1st of 2012.  This may be an area of technical resistance for old crop beans but the weather concerns in South America may be enough to continue fueling the bulls.


Soybean Chart


The latest forecast has a more aggressive high pressure ridge in Argentina’s 7-14 day outlook.  Argentina is going to need more precipitation to prevent increased crop stress over the next two weeks.  On the flip side, sections of Brazil are still too wet and harvest delays are prompting the market to also add weather premium to our markets. The concern is that some of those orders will have to switch back to the US. Our forecasted carryout is extremely low and we can’t absorb the extra business without another price spike for rationing domestic use.  We obviously haven’t seen this yet but the market is adjusting for the risk.


With a bumper crop still expected in Brazil, and large acres still expected in the US, we want to use this opportunity to make those new crop soybean hedges as we believe world stocks-to-use will be much more adequate assuming normal growing conditions in the US in 2013*.  If anything these harvest delays may support our bull spread (long March, short July soybeans) which is part of our re-ownership strategy for 2012 production.  We want to place our exit orders at +45 cents on that spread.  Please see the EHedger YouTube channel for more information on this strategy by clicking here.


I still think wheat fundamentals remain strong from the low ratings and the dry forecast.  Tomorrow we should get an update from the US Drought Monitor.  Here is the link for those who would like to follow the current drought ratings.


Drought Monitor (the next update will be on Thursday)


*Hedge recommendations should be carefully considered by each individual based on risk tolerance.  EHedger does not recommend hedging bushels that are not guaranteed by federal crop insurance.  Please contact EHedger for a custom marketing plan that adheres to your specific risk tolerance and business situation.


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Best Regards,




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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