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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 8/19/10

Aug 19, 2010

 

Corn and soybeans break on bullish news while wheat rallies ahead of tomorrow’s Stats Canada report.

Coming into the day the opening calls were higher for corn, beans, and wheat after the weekly export sales came in bullish. Exports for corn were at 2,888,600 MTs, well above expectations. Soybeans were at 2,231,100 MTs and wheat was at 1,412,500. After opening higher we quickly saw heavy resistance. By the time the market closed we were down 4 in December corn and 18 ½ in November soybeans. December wheat was up 25 ½ on the day.

Wheat’s strength came after rumors that Russia may have to now import 5 Million MTs of grain to cover their shortage. This report was then denounced by Russia’s ag ministry. The Canadian Wheat Board’s Stats Canada will be released tomorrow morning. They have already stated that all the information may not be reflected in the report as to how much acreage was lost last spring.

The weather forecast has improved for corn/soybeans and this helped contribute to the weakness today. The Pro Farmer Crop Tour wraps up today with its last stops. Overall pod counts have been on average higher than last year and corn yield estimates have been lower.

When talking with producers we continue to hear more and more stories of variability in the corn crop. There are fields that have the potential to bring back record yields and also fields that may be below trend-line. SDS has also started to pop up in many of the wetter areas across Iowa/Illinois.

The question is how long can the funds keep this buying up heading into harvest? They continue to hold massive long positions and against the normal seasonal trend. We do think the new crop corn still has to buy acres but the problem is the timing, it might not be a buy until after harvest. 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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