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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 and wheat rally; soybeans struggle 9/24/09

Sep 25, 2009





















 

SETTLEMENTS 9/24
         
 
Dec 09 Corn
336 ¼  
+ 6 
Nov 09 Beans
918 ½  
- 2  
Dec 09 Wheat
473
+ 13 
Dec 09 KC Wheat
485
+ 15 ½ 
Dec 09 Min Wheat
500 ¼    
+ 10 ¾
Dec 09 Meal
278.8
- 1.7
Dec 09 Oil
34.41
- 0.15
 
 
 
 
 
 
 
 
 


  

 
 
Corn and wheat closed higher and soybeans closed lower. Wheat and corn were strong for the majority of the day and soybeans were weak. Overall, all three markets held up well despite very weak outside markets and a strong dollar. Stories of disease problems in Central Illinois corn fields and concerns over frost fears in Argentina wheat were popular “reasons” for the rally in those markets. The bigger reason is probably the fact that the market has been short corn and wheat and long soybeans and now we are seeing these positions unwind. Weather models continue to flip flop with frost ideas next week. The latest run is indicating a frost at the end of next week with warmer weather at the beginning of next week.   So far temps do not look too threatening, with only the northernmost areas receiving temps in the low to mid 30’s. Unless the outlook changes, this scenario would not cause too much damage.   With harvest picking up for soybeans and not yet for corn, we are also seeing more hedge pressure in the soybeans than in corn. I expect to see corn run into decent selling pressure if prices rally another 5-10 cents from here.   Concerns over the U.S. dollar and the fact that interest rates are being held at extremely low levels continues to draw money into commodities. We continue to see a strong surge of “new money” enter our markets as we head into the end of the month. This month should be the same. For those of you who need to get caught up on sales ahead of harvest, I would use a rally in corn and soybeans to start catching up. We have a Sep. stocks report at the end of the month, and the Chinese holidays start on the first of October. I would make sure you are completely caught up on sales by Oct.1. It should be hard for corn and soybeans to maintain large rallies especially over the next 30 days. If you have storage, I still like making sales in the July corn as futures are over $3.50. I would make soybean sales as November futures rally above $9.25 to $9.50. Even if prices have put in a bottom (I don’t think they have), the market may have a very difficult time rallying from here. So, trying to make some sales on these 3-4 day rallies will keep you from felling like you have to make sales on the large breaks. Remember that we are recommending… Make sure you have your orders placed and call if you have any questions. 
 
 
 
 
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