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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.

Corn, Soybeans, and wheat post fresh highs 6/01/09

Jun 01, 2009
Corn, Soybeans, and wheat post fresh highs
 
SETTLEMENTS 6/01
         
 
July 09 Corn
445 ¾
+ 9 ½
Dec 09 Corn
469 ¼
+ 10
July 09 Beans
1218 ½
+ 34 ½
Nov 09 Beans
1086
+ 23 ½
July 09 Wheat
674 ½
+ 37 ¼
July 09 KC Wheat
726
+ 39
July 09 Min Wheat
795
+ 23
July 09 Meal
390.8
+ 8.3
July 09 Oil
40.45
+ 1.40
 
 
 
 
 
 
 
 
 
 
 
 
 






Corn, soybeans and wheat all closed sharply higher today. Strong closes last week, a weaker dollar and strong outside markets all helped the grains. The dollar made fresh lows and all of the commodities rallied sharply. The stock market also made fresh highs for the move. Money continues to pour into commodities, and the grains are no exception. (SRW) Wheat was the leader once again today, and I think this tells the story. While soybeans, corn and spring wheat have at least some bullish potential, SRW has outpaced them all despite having the weakest fundamentals. So RIGHT NOW, the biggest fundamental is money flow. Demand continues to weaken further and further on these sharp rallies. Producers continue to liquidate hog herds and feeding margins continue to dive deeper into the red (Hog prices made fresh lows once again today). If the Index funds are going to continue and rally prices, we should see spreads come under increasing pressure. If you have a good to decent basis level and are making cash sales, make sure you lock in the basis. If prices continue to rally from here, we could see basis levels at harvest much, much lower. 
Crop progress came in as expected for corn and spring wheat and was further behind for soybeans. Corn was 93% planted versus 94% last year and 97% average. The market was looking for 90-95% complete. Although some areas will have to re-plant, most areas have finished up planting corn this weekend. The market will be more focused on the next acreage report at the end of June to see if/and or how many acres were lost from the Planting Intentions report. Obviously, this will be very important for the corn market heading forward. If corn loses acres on the report, it will be hard for the market to break too far until we see how the “pollination window” looks. Soybean plantings came in at 66% versus 67% last year and 79% average. This was below expectations of 70-80% complete. Many producers in the Eastern belt are just finishing up on corn plantings and have just started planting soybeans this past week. We should see a sharp jump in soybean planting on next week’s progress report. Although planting progress is important, the June 30th report may be even more important. If and/or how many acres soybeans pick up in this report will be very important. It is always difficult to guess what that report will say, and this year is even worse. In a normal year, a wet spring would naturally lead you to believe there would be a modest increase in soybean acres at the expense of corn. However, not only did we have a wet spring in the Delta, Northern Plains and Midwest, but we also started with a very low acreage number courtesy of the USDA. Today is June 1. I know that the weather could keep some areas wet and unable to plant, but there is still a lot of time to plant soybeans in the areas that are not yet planted. I don’t know how many soybean acres will be planted, but with at least $10 cash soybeans off the combine (for those of you that don’t like when I use CBOT prices),the market is trying it’s hardest to get as many acres as it can.
 
 
 
 
 
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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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COMMENTS (3 Comments)

Anonymous
$10 soybeans at a 40 bushel national average your grossing $400 an acre. How do corn belt farmers make money at that when they are paying two and three hundred dollar cash rents.. My point is if you maintain the national avrage yield in corn or soybeans you should be netting a profit.
1:52 PM Jun 2nd
 
Anonymous
My feelings is that if we reach one of the lowest supplies in any one commodity and we dont maintain one of the highest prices in that commodity the market is broke.
1:43 PM Jun 2nd
 

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