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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 5/7/2012

May 07, 2012

Grains started the week mixed with wheat finishing higher while soybeans stayed lower throughout the trading session.  July soybeans closed 12 ½ cents lower at $14.65 ¾, July corn ¼ cent lower at $6.20, and July wheat 2 ½ cents higher at $6.12.

Outside markets were a major factor causing the early weakness in grains. Crude oil continued its selloff from last week as Sunday’s overnight low was over $10 lower than Thursday’s opening price!  The French and Greek election results over the weekend also put a negative spin on our markets as the Euro Currency fell and the US Dollar rallied.  The USDA announced another sale of US old crop Soybeans to "unknown destinations" this morning but it didn’t seem to give the market much support.  This dismal trade could also have been attributed to poor soybean export inspections this morning. 

Export inspections for soybeans were 9.992 mln bu when they were expected to be 16.0.  Corn inspections were 29.324 mln bu (expected 29.5), and wheat export inspections were 24.072 (expected 21.5).

Crop progress will not likely be viewed as bullish either with plantings still way ahead of schedule.  Corn is now 71% planted which compares to the 5-year average at this time of 47% planted. Corn is 32% emerged (13% on average).  Soybeans are 24% planted compared to 11% on average.  Winter wheat is 63% good to excellent and 63% headed (wheat is typically 34% headed at this time of year.) With the wheat crop so far ahead of schedule we could easily see a large amount of double crop soybean acres this year as timing and price make it possible.  The point is we could see many of these "non-traditional" double-crop acres plant soybeans as weather hasn’t been as restrictive.

A few technical reasons to be "bearish" soybeans:  The July soybean key reversal is still holding true and the November soybeans have settled below their trendline for the first time since the rally began back in December.

Chart: July Soybeans

Chart: November Soybeans

For now we like staying with the current EHedger recommendations.  To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Have a great week!

 

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EHedger

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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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