Apr 18, 2014
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June 2010 Archive for 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 6/28/10

Jun 28, 2010

 

 

 

Corn and wheat both settled lower on the day while new crop beans rallied into the close.  Likely we are seeing end-of-month book squaring and technical selling which brought December corn to new lows for the year settling at 3.52 ¾.  Export inspections were in-line with estimates for corn/wheat but were below expectations for soybeans.  Weather remains favorable with average temperatures expected over the next two weeks.  Hurricane Alex is expected to bring moisture to the Midwest next week.  Today’s corn crop rating dropped 2 points in the good/excellent category from 75 down to 73.  This is still better than last year at this time when we were at 72% good/excellent. Wednesday’s acreage report is expected to increase corn acres from 88.798 Mil (March number) to 89.302 million (average trade guess.)  With heavy fund selling in corn going into the report and end-of-quarter, we could see trade volatility continue into Wednesday even before we see the report.

 

Soybeans experienced heavy bear spreading today keeping the July Beans down 2 and the November up 6 ½.  In the last few minutes the electronic market traded all the way up to 924 ¾ before settling at 918 ½.  This volatility in the old-crop/new-crop spread has been especially noticed throughout the month of June.  The fundamentals in our opinion are still bearish with a large South American crop as well as a great start here in the Midwest.  Trade estimates for Wednesdays report show an average trade estimate of 78.292 Mil acres up from the March number of 78.098.  If you are not caught up on sales and need to get orders placed, please give us a call to discuss the available strategies.

 

Wheat has been closely tied to the price of corn lately and today was weak as well.  We have seen the basis improve tremendously for the soft red wheat.  This could be a result of the huge carry trade built into the market as everyone wants to hold cash wheat to store for future delivery.  We have seen strong export sales the last couple of weeks, another positive sign in a bearish market. This could give the market enough confidence to hold support in the Chicago wheat.  The average trade estimate for Wednesday’s report is 53.774 mil acres.  This is in line with March’s USDA number of 53.827.  From a producers standpoint if you are able to store your wheat, we feel selling deferred futures to capture the carry is a wise play in this market.

 

 In recent weeks we have discussed the basket trade of corn, soybeans, and wheat combined.  The chart below illustrates this as it has been testing the long-term trendline on the weekly chart.  We settled back below the support (red line) which could be seen technically as bearish.  As always, if you have any questions please do not hesitate to give us a call and we can go over your individual operation with you.

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Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.

 

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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.

 

Closing Grain Commentary 6/24/10

Jun 24, 2010

 

The corn and bean market struggled once again today while the Chicago Wheat contract finished slightly higher. This morning brought us a Census Crush report as well as our weekly export sales numbers. Corn sales came in at the high end of the estimates but this wasn’t enough to help the corn market finish higher as the July contract settled 1 ¾ cents lower at $3.44 3/4. The forecast still remains favorable for crop development for the majority of the corn- belt. We will continue to monitor the dry weather that has been reported throughout China and the Delta. Tomorrow is option expiration for the July options. If you still have July options on please get in touch with your broker to see what the best strategy going forward will be. We are very comfortable with the hedges that we have in place for both 2010-2011 and also the start that we have for 2011-2012. If you feel that you need to get caught up with any of our recommendations or simply would like to add additional protection as we progress through the summer, please give us a call.
 
The soybean market saw a strong a session of bull spreading as the July Nov spread settled the day 9 cents higher at 43 ½ cents. This caused November beans to settle the day 11 ½ cents lower at $9.12. This morning’s Census Crush number was better than the estimates but continued to decline relative to last month’s number. The trade estimates for the Census report were for 133.2 mil bu and the final report came back at 133.7mil bu. Last month’s crush was 136.5 mil bu. The last few months we have continually seen disappointing crush numbers and the bean market has suffered as a result. In our opinion, producers that still need to catch up on bean sales should have working orders from here to $9.50. With a strong South American crop and the great start that we have seen throughout parts of the Midwest these are levels that need to be protected. Soybean sales came in at 541,300 which was better than expected. Even with good sales beans managed to break into the close. This is a bearish sign so if you are not caught up on sales and need to get orders placed, please give us a call to discuss the available strategies.
 
The Chicago wheat market was the strongest of the three grains during today’s trading session. Much of this strength can be attributed to the strong export sales number this morning. This is the second week in a row of strong sales and gave the market enough confidence to hold support in the Chicago wheat. The July contract settled ¾ higher at $4.63. Lately we have been discussing the fact that wheat has been up against terribly bearish fundamentals. With that being said we feel that if corn were to hold these levels and not experience another sizable break wheat may have put in a low. However, if we were to see another strong break in corn, wheat can’t help but feel the pressure and would also have difficulty sustaining a rally. From a producers standpoint if you are able to store your wheat, we feel selling deferred futures to capture the carry is a wise play in this market. Tomorrow mornings export sales guesses for wheat are between 250,000mt-450,000mt. As always, if you have any questions please do not hesitate to give us a call and we can go over your individual operation with you.
 
 

 

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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.

 

Closing Grain Commentary 6/22/10

Jun 22, 2010
 

Grains had another negative day as corn and wheat led the way lower.  More follow through weakness and no help from the outside markets kept corn on the defensive for most of the day. Today the first cargo of US corn was delivered and accepted in China.  This was seen as positive since many in the market weren’t sure whether the corn would be accepted or not. The forecast still remains favorable for crop development in the US.  Soil moisture levels remain good and drier weather is in the forecast.  With crop ratings still holding well; and unless the markets are supported by fund buying we could see more long liquidation from here. With the reports we have coming in the near trading sessions, we could see volatility remain high. Having your orders in above the market are good ways to capture any quick/sharp rallies if they come. We are approaching the June 30th report and the end of the quarter. The Stats Canada report comes out tomorrow morning at 7:30am.  The report is data compiled from a survey of farmers which was taken before the weather impacted much of that region, so it may not reflect this weather. After the close of the grain session today we did see extra weakness in the outside markets.  This may be negative for the overnight open at 6pm CST.  If you are not caught up in sales please call your broker to go over your available strategies.





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Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
Get Organized. Get Ahead. Get EHedger
 
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.

Closing Grain Commentary 6/22/10

Jun 22, 2010
 

Grains had another negative day as corn and wheat led the way lower.  More follow through weakness and no help from the outside markets kept corn on the defensive for most of the day. Today the first cargo of US corn was delivered and accepted in China.  This was seen as positive since many in the market weren’t sure whether the corn would be accepted or not. The forecast still remains favorable for crop development in the US.  Soil moisture levels remain good and drier weather is in the forecast.  With crop ratings still holding well; and unless the markets are supported by fund buying we could see more long liquidation from here. With the reports we have coming in the near trading sessions, we could see volatility remain high. Having your orders in above the market are good ways to capture any quick/sharp rallies if they come. We are approaching the June 30th report and the end of the quarter. The Stats Canada report comes out tomorrow morning at 7:30am.  The report is data compiled from a survey of farmers which was taken before the weather impacted much of that region, so it may not reflect this weather. After the close of the grain session today we did see extra weakness in the outside markets.  This may be negative for the overnight open at 6pm CST.  If you are not caught up in sales please call your broker to go over your available strategies.





Get More From EHedger.
 
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
Get Organized. Get Ahead. Get EHedger
 
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.

Closing Grain Commentary 6/18/2010

Jun 19, 2010

The grain market had another week of strength with corn, beans, and wheat all sharply higher.  December corn ended up finishing at 3.80 ½, a 9 ½ cent gain from last Friday.  Nov beans were up 21 ¼ cents and Dec wheat was up 23 ¼ cents from last Friday.  We are coming to the end of the month and end of the 2nd quarter.  This recent strength may be end-of-quarter fund buying and it may also be end-of-quarter commodity dressing.  This could mean further strength than anticipated over the next two weeks. This week's commitment of traders report shows funds net long position increased by about 20,000 beans and 10,000 corn on Wednesday.

Informa came out with its acreage estimates this morning.  Corn was estimated at 89.318 which was a small decrease from their May number of 89.6.  Beans were at 78.845, an increase from 78.5.  Wheat was slightly higher at 53.75 from 53.6 previously. This week's USDA export sales numbers were good for corn and wheat but negative for old crop soybeans.  With the rally today we were able to get our recommendation filled to sell an additional 10% of 2010 corn at $3.84 (Dec Futures.)  If you still need to get caught up on this recommendation please call you broker.  The mid-day weather run showed an increase in precipitation for the Northern Midwest for Sunday - Tuesday.  Otherwise conditions still remain favorable for the majority of the corn-belt.

Looking ahead to next week we could see more strength as we approach the June 30th report and the end of the quarter. The Stats Canada report comes out on Wednesday at 7:30am.  The report is data compiled from a survey of farmers which was taken before the weather impacted much of that region, so it may not reflect this weather.  If you are not caught up in sales, having your orders placed could be a way to capture any quick/sharp rallies in the market. Please call your broker if you would like to go over your current positions or any recommendations.

Get More From EHedger.

 

Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.

Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.

 

Get Organized. Get Ahead. Get EHedger

 

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.

 

Closing Grain Commentary 6/17/10

Jun 17, 2010
 
 
This morning at 7:30 am the USDA released its weekly export sales numbers for corn, wheat, and beans. The export sales for corn were 1.09 mt for old crop and 136,500 mt for new crop. The corn market was fairly quiet for most of the session and ended up settling 1 ¼ cents higher at 3.57 ½ for the July contract. Yesterday we issued a recommendation for producers to sell another 10% of 2010-2011 corn at $3.84 basis the December futures. The high for the December contract since we issued the recommendation has been $3.81 ½. We feel that having this order in above the market is a good idea should we see buying come into the markets over night. Tomorrow morning Informa will be issuing an updated acreage estimate. The Informa numbers are usually released around 10:30am. Tomorrow will also bring us a Cattle on Feed report at 2:00 pm. The estimates for the Cattle on Feed report are 100.8% on feed, 122.3% placed in May, and 96.8% marketed in May. The mid-day weather run still appears to favor positive planting/growing conditions for the majority of the corn belt. If you feel that you need to catch up on the current recommendations that we have issued or are looking for additional protection as we continue through planting and into the summer please get in touch with your broker to discuss the available strategies.
 
The USDA export sales numbers were disappointing for old crop beans at 136,300 mt and good for new crop at 452,100. This may have contributed the bear spreading that the July Nov spread experienced. The July Nov spread finished the day lower by 6 ½ cents settling at 27 cents. Over the past few weeks we have been discussing the chance that old crop bean sales could continue to disappoint as the South American crop comes online. Today’s action further validates this point and is something that a producer needs to closely monitor. There is always the potential to see continued buying in the bean complex and in our opinion these rallies need to be taken advantage.   Having your soybean orders in above the market will be a good idea to capture any quick rallies that we may see. If you feel that you need to catch up on your bean hedging strategies please give us a call and we can discuss the available strategies for your farm operation.
 
July Chicago wheat finished the day 1 1/4 cents higher at $4.62 3/4. This morning’s export sales were very strong for new crop wheat at 959,500 mt. The wheat market has experienced the most bearish of fundamentals. In our opinion unless corn experiences another strong selloff the wheat market may have put in the low. As we approach the end of the month and also the end of the second quarter the wheat market may be susceptible to continued short covering. For producers that are looking for strategies to hedge wheat we feel that the best option would be to sell deferred futures and store the physical. This strategy allows the producer to capture the carry that still remains in the market. If this isn’t a viable option for your farm operation please get in touch with your broker to look at other strategies that may be available.

 
Get More From EHedger.
 
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
Get Organized. Get Ahead. Get EHedger
 
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.

Closing Grain Commentary 6/17/10

Jun 17, 2010
 
 
This morning at 7:30 am the USDA released its weekly export sales numbers for corn, wheat, and beans. The export sales for corn were 1.09 mt for old crop and 136,500 mt for new crop. The corn market was fairly quiet for most of the session and ended up settling 1 ¼ cents higher at 3.57 ½ for the July contract. Yesterday we issued a recommendation for producers to sell another 10% of 2010-2011 corn at $3.84 basis the December futures. The high for the December contract since we issued the recommendation has been $3.81 ½. We feel that having this order in above the market is a good idea should we see buying come into the markets over night. Tomorrow morning Informa will be issuing an updated acreage estimate. The Informa numbers are usually released around 10:30am. Tomorrow will also bring us a Cattle on Feed report at 2:00 pm. The estimates for the Cattle on Feed report are 100.8% on feed, 122.3% placed in May, and 96.8% marketed in May. The mid-day weather run still appears to favor positive planting/growing conditions for the majority of the corn belt. If you feel that you need to catch up on the current recommendations that we have issued or are looking for additional protection as we continue through planting and into the summer please get in touch with your broker to discuss the available strategies.
 
The USDA export sales numbers were disappointing for old crop beans at 136,300 mt and good for new crop at 452,100. This may have contributed the bear spreading that the July Nov spread experienced. The July Nov spread finished the day lower by 6 ½ cents settling at 27 cents. Over the past few weeks we have been discussing the chance that old crop bean sales could continue to disappoint as the South American crop comes online. Today’s action further validates this point and is something that a producer needs to closely monitor. There is always the potential to see continued buying in the bean complex and in our opinion these rallies need to be taken advantage.   Having your soybean orders in above the market will be a good idea to capture any quick rallies that we may see. If you feel that you need to catch up on your bean hedging strategies please give us a call and we can discuss the available strategies for your farm operation.
 
July Chicago wheat finished the day 1 1/4 cents higher at $4.62 3/4. This morning’s export sales were very strong for new crop wheat at 959,500 mt. The wheat market has experienced the most bearish of fundamentals. In our opinion unless corn experiences another strong selloff the wheat market may have put in the low. As we approach the end of the month and also the end of the second quarter the wheat market may be susceptible to continued short covering. For producers that are looking for strategies to hedge wheat we feel that the best option would be to sell deferred futures and store the physical. This strategy allows the producer to capture the carry that still remains in the market. If this isn’t a viable option for your farm operation please get in touch with your broker to look at other strategies that may be available.

 
Get More From EHedger.
 
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
Get Organized. Get Ahead. Get EHedger
 
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.

Closing Grain Commentary 6/16/10

Jun 16, 2010
 
Today’s action in the corn market had July corn trade as much as 6¾ cents higher before settling the day 2½ cents higher at $3.56¼ . Early in the trading session, we issued two corn-related recommendations. The first recommendation was to sell the remaining 15% of old crop 2009-2010 corn in the cash market. The second recommendation was to place orders to sell another 10% of 2010-2011 corn at $3.84 basis the December futures. The midday weather run still appears to favor positive planting/growing conditions for most areas throughout the Corn Belt. Tomorrow morning at 7:30 a.m., the USDA will release the weekly export sales numbers for corn, wheat and beans. The estimates for corn are between 600,000 mt and 900,000 mt. In our opinion, the corn market still appears to be range-bound. For producers who are looking to catch up on the hedge recommendations that we have issued or simply looking to get further protection as we continue on through the summer, please give your broker a call.
 
The soybean market had a positive day as July beans finished 8¼ cents higher at $9.57¾ . New crop November beans also finished 9 cents stronger at $9.24½. There is the potential to see continued buying in the bean complex, and in our opinion these rallies need to be taken advantage of. We still feel that with a large South American crop coming online, our export business will likely continue to decrease, causing the rallies we see to be short-lived. Having your soybean orders in above the market will be a good idea to capture bounces like we saw early in the session today. As mentioned above, the USDA will release exports tomorrow morning. The estimates for the bean exports are between 350,000 mt and 550,000 mt. The actual numbers will be available in our morning letter and also on the EHedger Morning Hotline. If you feel that you need to catch up on your bean-hedging strategies, please give us a call and we can discuss the available strategies for your farm operation.
 
July Chicago wheat finished the day 9½ cents higher at $9.57¾ . As we have been discussing lately, the wheat market has appeared to be oversold compared to corn and beans. The Canadian Wheat Board report could be what traders need to see to start covering some of the massive spec shorts in the wheat market. We could see further short covering from here, which could give us the strength to make more sales if you are still underhedged. For producers who are able to store wheat, there are still strategies to sell deferred futures and capture the carry that remains in the market. The export estimates for tomorrow morning's report are between 150,000 mt and 350,000 mt. Please call your broker to discuss the best strategies available for your wheat operation.

Get More From EHedger.
 
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
Get Organized. Get Ahead. Get EHedger
 
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 EHedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold EHedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.

EHedger Closing Grain Commentary 6/15/10

Jun 15, 2010
 
Grains started off well today with soybeans leading the way higher, but towards the close the market quickly corrected and ended up finishing mixed to lower on the day. No major changes in weather or other market news. Yesterday I talked about the news that the Canadian Wheat Board said they could see total acreage planted down by as much as 8 – 12 ½ million acres. This has been especially bullish for Spring Wheat, Canola, and Oats. The oats had expanded limits today and ended up touching the limit but settling 27 cents higher meaning we will go back to regular limits tomorrow (20 cents.) The outside markets were stronger with equities and crude oil sharply higher and the US Dollar lower. Crop ratings for corn are currently 77% good/excellent which is up 1 point in the excellent category from last week. Weather still looks good for most of the corn-belt with a drier forecast in the works for the later part of the week and adequate soil moisture levels. We will continue to monitor daily forecast changes over the next couple of weeks.
 
Soybeans were the market leader for most of the day but found much resistance on the close. There is really not much new news out there. Yesterday’s Nopa crush estimates were disappointing at 127.8 Mil Bu when the estimate was at 130.2 Mil Bu. Crop progress shows soybeans 91% planted which was right around what the market was expecting. Crop conditions are rated 73% good/excellent. We could see some continued buying from the outside markets but we still would use these rallies for those who need to catch up on sales. We still feel that with a large South American crop coming online our export business will likely continue to decrease. Having your soybean orders in above the market will be a good idea to capture bounces like the 10 cent intra-day rally we saw today. Today we did get filled on our orders that were recommended on 5/13/2010 to buy 30% of your 2010 soybean production in 8.00 Nov soybean puts and sell 10% of production in 10.00 Nov soybean calls all for a 1 cent credit.
 
Like corn and soybeans, wheat was stronger for most of the day but finished only up a ¼ cent in July Chicago contract. This market has been oversold compared to corn/beans. The Canadian report could be what traders need to see to start covering some of the massive spec shorts in the wheat market. We could see further short-covering from here which could give us the strength to make more sales if you are still under-hedged. For producers that are able to store wheat there are still strategies to sell deferred futures and capture the carry that remains in the market. If you are not caught up to our recommended levels of protection for corn/beans/wheat, please call you broker to discuss your hedging opportunities going forward.



 
Get More From EHedger.
 
Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
Get Organized. Get Ahead. Get EHedger
 
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.

 

Closing Grain Commentary 6/14/10

Jun 14, 2010

A strong day for the grains as corn, wheat, and soybeans all finished higher.  Much of this strength is spill-over buying from the Canadian markets. News that the Canadian Wheat Board said they could see total acreage planted down by as much as 8 - 12 ½ million acres.  This is especially bullish for Spring Wheat, Canola, and Oats.  We have certainly seen this in the market over the last couple of trading sessions.  Oats were limit up today and Minneapolis Spring wheat was up 21 1/2 on the close. This helped corn which started off the day stronger and finished towards the highs of the day with December finishing up 4 cents. The outside markets were also bullish for grains today with the sharply weaker US Dollar and stronger Crude Oil. A sale of 120,000 MT of 2009-2010 corn to China was announced by the USDA this morning. Export inspections came in at 37,075,000 bushels for corn which was right in line with trade estimates.  Crop ratings for corn were up to 77% good/excellent gaining 1 point in the excellent category.  Weather still looks good for most of the corn-belt with a drier forecast in the works for the later part of the week and adequate soil moisture levels.  We will continue to monitor daily forecast changes over the next couple of weeks.

For soybean news; Nopa crush estimates were disappointing at 127.8 Mil Bu when the estimate was at 130.2 Mil Bu.  The weekly export inspections were in line with expectations.  Crop progress shows soybeans 91% planted which was right around what the market was expecting. Crop conditions were rated 73% good/excellent which was slightly below expectations but not by much. We could see some continued buying from the outside markets but we still would use these rallies for those who need to catch up on sales.  We still feel that with a large South American crop coming online our export business will likely continue to decrease.  Having your soybean orders in above the market will be a good idea to capture bounces like the ones we have seen the last couple of trading sessions.

Wheat has gained back much of what it lost over the past two weeks in just two days. This market had been oversold compared to corn/beans.  The Canadian report could be what traders need to see to start covering some of the massive spec shorts in the wheat market.  We could see further short-covering from here which could give us the strength to make more sales if you are still under-hedged.  For producers that are able to store wheat there are still strategies to sell deferred futures and capture the carry that remains in the market.  If you are not caught up to our recommended levels of protection for corn/beans/wheat, please call you broker to discuss your hedging opportunities going forward.

Get More From EHedger.

 

Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.

Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.

  

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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.

EHedger Closing Grain Commentary June 11th

Jun 11, 2010

Grains finished off the week strong with corn, wheat and beans all closing higher. The corn market was stronger throughout the day and settled December corn 11 ½ cents higher on the week.  Much of corn's strength is follow-through buying from Thursday's USDA Supply and Demand Report. The report came back with a reduction in both 2009-10 ending stocks and also reduced stocks for the 2010-2011 crop. The reason for the reduced stocks numbers is the increase in corn demand from the ethanol industry. The 2009-2010 corn demand for ethanol rose from 4.4 billion bushels to 4.55 billion bushels. Next year's demand rose from an estimated 4.6 billion bushels to 4.7 billion bushels. Below you will find a chart with all of the figures that were released from the USDA Supply and Demand Report. In our opinion we still need to be monitoring the daily weather runs to be sure that no weather concerns pop up. According to the weather sources that we monitor, the weather appears to be favorable for continued planting progress and growth.  For producers that need to catch up on sales we feel that a rally back to the $3.75-$3.80 area in the December contract is a position to place orders. As I mentioned earlier, having resting orders in above the market is a good idea should we see a quick bounce from here. This week's exports were friendly and there have been rumors of more cargos sold to China.  This is a good sign given the recent break in prices. It was clear this week that we found a level that enticed export business for US corn. We feel that we are well positioned at this time, if you have any questions about your position or need to look at strategies for further protection please give your broker a call. 

Soybeans had a strong day to recapture much of the weakness we saw earlier in the week. The November contract finished 14 ½ higher on the day and 9 ¼ higher on the week. There was heavy bull spreading in the bean complex ahead of the USDA report and the last two days the market has been unwinding the spread. In our opinion the USDA report offered nothing friendly to the overall fundamental story for beans.  Today's sharp bean rally mostly came in the last 20 minutes of the session following the corn/wheat rally.  This is great for those who still need to get caught up on new crop sales. On another positive note we did see two announcements from the USDA this week, both of them were sales of 40,000 T of soyoil each to China for this year.  We still feel that with a large South American crop coming online our export business will likely continue to decrease.  Having orders in above the market will be a good idea to capture bounces in the market like the one we saw on the close today. If you are in need of a strategy to protect your soybean crop please get in touch with your broker to discuss the available strategies.

The wheat market saw a sharp rally today first in the Chicago wheat, followed by very large intra-day rally in the Minneapolis wheat.  July Minneapolis was up as much as 37 ¾ cents but only finished 11 ½ higher on the day.  The market has been beaten down more than corn/soybeans have over the last 30 days and we saw some short covering today. The USDA report showed this year's carryout down 20 million bushels as a result of our exports. Next year's production is estimated to be higher by 24 million bushels while an increase in feed demand by 10 million bushels was also reported.  In our opinion we are still in a comfortable place with regard to where wheat stocks stand on a global level. We can still see a few swings like today but the fundamental picture still remains bearish in our opinion. For producers that are able to store wheat there are strategies to sell deferred futures and capture the carry that remains in the market.  If you are not caught up to our recommended levels of protection, please call you broker to discuss your hedging opportunities going forward.

 

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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.

Closing Grain Commentary June 10th

Jun 10, 2010
The corn market saw a nice turn around today finishing 5 cents higher and settling at $3.43 ¼ for the July contract. The USDA Supply and Demand report came back with a reduction in both 2009-10 ending stocks and also reduced stocks for the 2010-2011 crop. The reason for the reduced stocks numbers is the increase in corn demand from the ethanol industry. The 2009-2010 corn demand for ethanol rose from 4.4 billion bushels to 4.55 billion bushels. Next year’s demand rose from an estimated 4.6 billion bushels to 4.7 billion bushels. Below you will find a chart with all of the figures that were released from the USDA Supply and Demand Report. In our opinion we still need to be monitoring the daily weather runs to be sure that no weather concerns pop up. According to the weather sources that we monitor, the weather appears to be favorable for continued planting progress and growth.  For producers that need to catch up on sales we feel that a rally back to the $3.75-$3.80 area in the December contract is a position to place orders. One thing to think about is the fact that the start of pollination is only about three weeks away.  We realize that this is still a long time, so as I mentioned earlier having resting orders in above the market is a good idea should we see a quick bounce. This morning export sales numbers for corn were friendly. This is a good sign given the recent break in prices. With the recent break that we have been on it was clear this week that we found a level that enticed export business for US corn. We feel that we are well positioned at this time, if you have any questions about your position or need to look at strategies for further protection please give your broker a call. 
Soybeans had a rough day. The July contract finished 8 ½ cents lower at $9.35 while the November contract lost 1 ¾ cents to close at $8.94 ¾. There was heavy bull spreading in the bean complex ahead of the USDA report and today was an unwinding of that spread. In our opinion the USDA report offered nothing friendly to the overall fundamental story for beans. The last few months have offered disappointing crush numbers and export sales have been nothing special. Today we did see a positive export sales number given the recent break in prices. This is a good sign for producers that still need to get caught up on sales. We still feel that with a large South American crop coming online our export business will likely continue to decrease. Having orders in above the market will be a good idea to possibly capture a bounce in the market. If you are in need of a strategy to protect your soybean crop please get in touch with your broker to discuss the available strategies.
The wheat market saw the July Chicago contract finish higher by 5 ¼ cents to close at $4.33 ¼ .  The USDA report this morning showed this year’s carryout down 20 million bushels as a result of our exports. Next year’s production is estimated to be higher by 24 million bushels while an increase in feed demand by 10 million bushels was also reported.  In our opinion we are still in a comfortable place with regard to where wheat stocks stand on a global level. The fundamental picture still remains bearish in our opinion. For producers that are able to store wheat there are strategies to sell deferred futures and capture the carry that remains in the market.  Another thing to think about going forward; we have settled below the support line on the weekly continuous chart of Corn, Wheat, and Beans all added together as a basket (this has been discussed in previous letters -see chart below.)  The red support line is where we recently broke this long term trend. The blue line is the 10 year moving average of corn wheat and beans as a basket which is still about $2.33 below today’s settlement. From a technical standpoint this could mean further weakness from here.  If you are not caught up to our recommended levels of protection, please call you broker to discuss your hedging opportunities going forward.
 

 

Closing Grain Commentary 6-9-10

Jun 09, 2010
Today’s session saw corn trade higher for the entire session before settling up 2 cents at $3.58 ½ in the December contract. Once again we saw a weaker dollar and stronger equities markets support corn for most of today’s session. Tomorrow morning at 7:30 am the USDA will release the June Supply and Demand numbers. Below you will find the trade estimates for this report. We will be hosting a webinar at 8:30 am tomorrow morning with our reaction to the report, you can sign up for a seat to the webinar by clicking on the link at the top of the page. In addition to the USDA report we will also have export sales at 7:30 am. The export sales estimates for corn are 300,000-800,000 mt. We are still looking at favorable weather for most areas throughout the corn-belt for the next 6-10 days. One thing to think about is the fact that the start of pollination is only about three weeks away. If the 2-week forecast continues to look great the market could keep dropping weather premium out of corn. Also, in the KC wheat contract we are seeing some places bidding wheat for under the price of corn. With a large wheat crop coming to the market, it could be possible to see up to a couple 100 million bushels of demand move away from corn to wheat. Asian buyers have already started buying some feed-wheat in place of corn. As the Euro Currency weakens, Euro denominated feed-grade wheat looks cheaper, and is one more thing corn has to compete with. We feel well positioned at this time. If you have any questions about where you are sitting as we progress through the growing season please get in touch with your broker.
 
The soybean complex saw commercial bull spreading contribute to the July bean contract settling 12 ½ cents higher at $9.43 1/2. The November contract also settled higher by 2 ¼ cents at $8.96. Farmers have been reluctant sellers in the bean complex and with interior basis levels strengthening commercials have been seen bidding for beans. As I mentioned earlier, in addition to the USDA report we will have export sales numbers. The average trade guess for beans is 100,000—500,000 mt. The last few weeks we have seen a drastic slow down in the export sales of beans. This morning we did sell 240,000 mt for 2010-2011 delivery to China. With the soybeans out of South America continuing to come online we will have to closely monitor our weekly sales. If the weather continues to cooperate, the bean market may be susceptible to a further break from these levels. As a producer, we would continue to keep all of our hedges in place. For those producers that need to catch up on sales, having resting orders in always is a wise idea given the volatility that we have seen. As always, if you have any questions about your individual operation or are looking for bean hedging strategies please get in touch with your broker.
 
The wheat market struggled for most of the session before finishing just off the lows down 4 ¼ cents at $4.28 for the July Chicago contract . Wheat continues to struggle based on the fundamentals in place as well as outside markets. I talked a little about this in the corn commentary but I will mention it again. As the Euro Currency continues to deteriorate, European wheat looks cheap. Much of our demand could be shifted to Europe leaving our fundamentals weaker. We have been hearing that farmers out West are beginning to ramp up corn sales to make room for the upcoming wheat harvest. If you are a wheat producer that has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Another thing to think about going forward; we have settled below the support line on the weekly continuous chart of Corn, Wheat, and Beans all added together as a basket (this has been discussed in previous letters -see chart below.) From a technical standpoint this could mean further weakness from here. If you are not caught up to our recommended levels of protection, please call you broker to discuss your hedging opportunities going forward.
 
 

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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.

Closing Grain Commentary June 8th

Jun 08, 2010
Grains traded both sides of the market before finishing mixed on the close. Corn finished the day stronger with July finishing up 1 ½. The July 10 contract low is 3.33 ¾ and held support above that level today. A weaker dollar and stronger equities market also helped corn hold support. Crop progress shows corn at 94 percent emerged with crop conditions at 76% good to excellent. The market was expecting a big number for this so this may be already worked into the market price. We are still looking at favorable weather for most areas throughout the corn-belt for the next 6-10 days. One thing to think about is the fact that the start of pollination is only about three weeks away. If the 2-week forecast continues to look great the market could keep dropping weather premium out of corn. Also, in the KC wheat contract we are seeing some places bidding wheat for under the price of corn. With a large wheat crop coming to the market, it could be possible to see up to a couple 100 million bushels of demand move away from corn to wheat. Asian buyers have already started buying some feed-wheat in place of corn. As the Euro Currency weakens, Euro denominated feed-grade wheat looks cheaper, and is one more thing corn has to compete with.
 
Soybeans were weak for most of the day with a sharp break on the close. Much of the liquidation was after the market traded 9 month lows in new crop. The last electronic trade was at 8.88 ½ for November which is down 11 ½ on the day. The settlements are still taken from the pit trade which made the settlement down only 5 ¾ cents at 8.94 ¼. The overnight trade may see a slight decline to bring this more in-line with the electronic close. Crop progress shows beans at 84 percent planted and 66 percent emerged. The Crop Condition for soybeans was rated at 75% good to excellent. This was better than expected and the best first rating seen for a US bean crop. The record South American crop continues to come online and global stocks this fall will be 45% larger than last year. We will still have to grow a crop here in the U.S. obviously, but if we do have trend line yields we could see much lower prices this fall.
 
Wheat settled unchanged after falling from the highs of the day. Wheat continues to struggle based on the fundamentals in place as well as outside markets. I talked a little about this in the corn commentary but I will mention it again. As the Euro Currency continues to deteriorate, European wheat looks cheap. Much of our demand could be shifted to Europe leaving our fundamentals weaker. We have been hearing that farmers out West are beginning to ramp up corn sales to make room for the upcoming wheat harvest. If you are a wheat producer that has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Another thing to think about going forward; we have settled below the support line on the weekly continuous chart of Corn, Wheat, and Beans all added together as a basket (this has been discussed in previous letters -see chart below.) From a technical standpoint this could mean further weakness from here. If you are not caught up to our recommended levels of protection, please call you broker to discuss your hedging opportunities going forward.
 
 
 
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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.
 
 

EHedger Morning Grain Bulletin June 8th

Jun 08, 2010
 
 
The Bottom Line:
 
1. Overnight trade was slightly lower for corn, and mixed for wheat and beans.
 
2. This morning's weather reports still show positive growing/ planting conditions for the next 6-10 days. 
 
3. Yesterdays Export Inspections were disappointing for corn and beans and in-line with estimates for wheat.
 
4. Yesterdays crop progress showed corn is 94% emerged vs. 85% a year ago. Corn is rated 76% in the good to excellent category vs. 69% a year ago, this is in line with estimates.
 
5. Trade estimates for Thursdays USDA Supply and Demand report corn ending stocks are for 2009-2010 1.724 bil bu vs. 1.738 bil bu. For 2010-2011 ending stocks estimates are 1.831 bil bu vs. 1.818.
6. Crop progress for beans yesterday revealed that 84% of the crop is planted vs. 76% a year ago. The first bean rating was released and it showed that the crop was 75% good to excellent.
 
7. Trade estimates for Thursdays USDA Supply and Demand report bean ending stocks are 2009-2010 184 mil bu vs. 190 mil bu.
 
8. Yesterdays Export Inspections were disappointing for corn and beans and in-line with estimates for wheat.
 
9. Trade estimates for Thursdays USDA Supply and Demand report all wheat production is 2.054 bil bu vs. 2.043 and the ending stocks are estimated to be for 2009-2010 947 mil bu vs. 950 mil bu. For 2010-2011 987 mil bu vs. 997 mil bu.
 
10. The outside markets need to be closely monitored as the European debt crisis still is weighing on the minds of all investors.
 
11. As of this writing the stock market is slightly higher while the dollar index is unchanegd. Crude oil is trading unchanged while gold is trading $3.20 higher.

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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.

EHedger Weekly Grain Wrap-Up

Jun 04, 2010


Grains finished on the lows of the week with new crop corn, beans, and wheat all settling at fresh 2010 settlement lows. Corn lost 20 ½ cents on the week settling the December contract at 359 ½. Much weaker than expected corn sales this morning and a stronger US Dollar kept corn on the defensive for the session. Exports this week were at 198,700 MT for this year and 114,400 MT for next which is well below the trade estimates of between 700,000 and 1,250,000 MT.  It appears corn has broken through the bottom end of the range and may find its next technical support at the contract lows of 333 ¾ (July) which was the price in September 2009. The weather still looks favorable for most areas throughout the corn-belt for the next 6-10 days. As is the case with any weather market day to day forecasts need to be monitored. We should continue to see strong progress with already planted crops and also areas that need to catch up. If the weather stays good through pollination, we will likely see December futures trade under $3.50 and head even lower towards harvest.  If we were to see a weather problem her in the U.S. and/or in China this growing season we should see corn prices find a bottom in the coming months. We are hearing reports out of the West of farmers that are selling corn to make room for the upcoming wheat harvest. This could continue to put pressure on the corn market as we go forward.  For those producers that still need to get caught up on the hedge recommendations that we have issued please call your broker and discuss the available plan for your operation.
November soybeans finished 7 ¾ lower on the week at $9.00.  Like corn, export sales this morning came in weaker than expected. Estimates were between 200,000 and 400,000 MT but the actual were at 135,000 this year and 13,100 for next.  The record South American crop continues to come online and global stocks this fall will be 45% larger than last year. We will still have to grow a crop here in the U.S. obviously, but if we do have trend line yields we could see much lower prices this fall.  A lot can change (and usually does!) but if you are not caught up on sales I would look for a rally back towards $9.30-9.50 in November soybeans to do so. For those producers that have their hedges in place we would continue to stay hedged.
December wheat futures finished 22 cents lower on the week. Wheat continues to close on contract lows and hasn’t seen a higher day-close in 5 trading sessions. Wheat continues to struggle based on the fundamentals in place as well as outside markets. As the Euro Currency continues to deteriorate, European wheat looks cheap. Much of our demand could be shifted to Europe leaving our fundamentals weaker. As previously mentioned we have been hearing that farmers out West are beginning to ramp up corn sales to make room for the upcoming wheat harvest. If you are a wheat producer that has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Something to think about going forward; we have settled below the support line on the weekly continues chart of Corn, Wheat, and Beans as discussed in previous letters (see chart below.) From a technical standpoint this could mean further weakness from here. If you are not caught up to our recommended levels of protection, please call you broker to discuss your hedging opportunities going forward.





























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Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
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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.

Closing Grain Commentary 6-3-10

Jun 03, 2010
After a rough start to the session July corn bounced off the early morning lows to settle a penny higher at $3.49 ½  .  As we have been discussing the last few weeks, it appears that we are still in a trading range within the corn complex.  The corn market has been on a fairly large break for the past few weeks and as we have seen before as we break down to the $3.45-$3.50 area in July corn buying interest picks back up.   The weather still looks favorable for most areas throughout the corn belt for the next 6-10 days. As is the case with any weather market day to day forecasts need to be monitored. We should continue to see strong progress with already planted crops and also areas that need to catch up. If the weather stays good through pollination, we will likely see December futures trade under $3.50 and head even lower towards harvest.  If we were to see a weather problem her in the  U.S. and/or in China this growing season we should see corn prices find a bottom in the coming months. We are hearing reports out of the West of farmers that are selling corn to make room for the upcoming wheat harvest. This could continue to put pressure on the corn market as we go forward. Tomorrow morning we will have export sales numbers at 7:30 am. Trading estimates are 700,000-1,250,000 mt. We will discuss the actual sales numbers in our morning letter and also on the EHedger Morning hotline.  I still think we are positioned well at this time. For those producers that still need to get caught up on the hedge recommendations that we have issued please call your broker and discuss the available plan for your operation.
Bull spreading was the theme of the day in the soybean complex as July beans settled 22 ½ cents higher at $9.55 while the November contract finished 16 ¾ cents higher at $9.19 ¾ . Based on the fundamentals that we have right now we feel that rallies such as the one we saw today need to be taken advantage of if there are cash sales that need to be caught up on. The record South American crop continues to come online and global stocks this fall will be 45% larger than last year. We will still have to grow a crop here in the U.S. obviously, but if we do have trend line yields we could see much lower prices this fall.  A lot can change (and usually does!) but if you are not caught up on sales I would look for a rally back towards $9.30-9.50 in November soybeans to do so. The estimates for tomorrow morning bean export sales are 200,000-400,000 mt. For those producers that have their hedges in place we would continue to stay hedged.
The wheat market tried to rally early in the day before facing another set-back on the close. The July Chicago wheat contract settled ¾ of a cent lower at $4.41 ¾. Wheat continues to struggle based on the fundamentals that are in place as well as outside markets. As previously mentioned we have been hearing that farmers out West are beginning to ramp up corn sales to make room for the upcoming wheat harvest. In our opinion if you are a wheat producer that has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Please call your broker to see if this is a strategy that can benefit your operation. 

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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.
 

Closing Grain Commentary 6/2/10

Jun 02, 2010

July corn had a tough trading day Tuesday as the contract finished just off its lows at $3.48 ½, which was 5 ½ cents lower. Fund liquidation appears to be taking place and that was the theme with about 15 minutes to go in today’s session.  We are right back down to the low end of the range for corn. The weather still looks favorable for most areas throughout the corn belt for the next 6-10 days. As is the case with any weather market day to day forecasts need to be monitored. We should continue to see strong progress with already planted crops and also areas that need to catch up. If the weather stays good through pollination, we will likely see December futures trade under $3.50 and head even lower towards harvest.  If we were to see a weather problem her in the  U.S. and/or in China this growing season we should see corn prices find a bottom in the coming months. We are hearing reports out of the West of farmers that are selling corn to make room for the upcoming wheat harvest. This could continue to put pressure on the corn market as we go forward.  I still think we are positioned well at this time. For those producers that still need to get caught up on the hedge recommendations that we have issued please call your broker and discuss the available plan for your operation.

The soybean complex hung on to slight gains as the trading day came to a close. The July contract finished ½ cent higher at $9.32 ½. With the corn and wheat markets falling apart beans were still able to hang in there. Based on the fundamentals that we have right now we feel that the bean market may be susceptible to a further break from these levels if the weather continues to hold. The record South American crop continues to come online and global stocks this fall will be 45% larger than last year. We will still have to grow a crop here in the U.S. obviously, but if we do have trend line yields we could see much lower prices this fall.  A lot can change (and usually does!) but if you are not caught up on sales I would look for a rally back towards $9.30-9.50 in November soybeans to do so. For those producers that have their hedges in place we would continue to stay hedged.

Another tough day in the wheat market. The July Chicago contract settled 8 ¼ cents lower at $4.42 ½.   Wheat continues to struggle based on the fundamentals that are in place as well as outside markets. As previously mentioned we have been hearing that farmers out West are beginning to ramp up corn sales to make room for the upcoming wheat harvest. In our opinion if you are a wheat producer that has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Please call your broker to see if this is a strategy that can benefit your operation.

 
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Our commentaries are just one part of our whole risk management service. Please go to http://www.ehedger.com/getmore.html for a free two-week trial of our full member website that gives you access to all our hedge and marketing recommendations, educational tools, market snapshots and much more.
Also learn about our acclaimed AMMO Program that helps producers optimize their marketing strategies using the premier tools and insights in the industry.
 
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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.

Closing Grain Commentary June 1st

Jun 02, 2010

More follow-through selling came in after the long weekend, keeping grains on their lows. July corn finished the day down 5 cents at $3.54. Even though the outside markets came well off their overnight lows, by the grain close there looked to be some more long liquidation, especially in the wheat. We are right back down to the low end of the range for corn. The weather still looks favorable for most areas. We should continue to see progress with already planted crops and also areas that need to catch up. If the weather stays good through pollination, we will likely see December futures trade under $3.50 and head even lower toward harvest. If the weather turns for the worst here in the U.S. and/or in China this growing season, we should see corn prices find a bottom in the coming months. Export inspections came in better than expected this morning at 47,412,000 bu. (estimated at 34-40). Crop progress shows corn at 97% planted compared to a five-year average of 93%. Crop conditions are at 76% in the good to excellent ratings. This is seen as bearish as it outpaced estimates of 70%-72% and the five-year average is at 70%. We are hearing reports out of the West of farmers selling corn to make room for the upcoming wheat harvest. This could continue to put pressure on the corn market as we go forward. I still think we are positioned well at this time. For those producers who still need to get caught up on the hedge recommendations that we have issued, please call your broker and discuss the available plan for your operation.

Soybeans closed towards the lows of the day, with November beans having the lowest close since October 2009 at 902¾. Inspections were at 5,718,000 bu. for beans this morning (estimated at 5-9 million). Crop progress today shows beans at 74% planted compared to a five-year average of 68%. Based on the fundamentals that we have right now, we feel that the bean market may be susceptible to a further break from these levels if the weather continues to hold. The record South American crop continues to come online and global stocks this fall will be 45% larger than last year. We will still have to grow a crop here in the U.S., obviously, but if we do have trendline yields, we could see much lower prices this fall. A lot can change (and usually does!), but if you are not caught up on sales, I would look for a rally back toward $9.30-$9.50 in November soybeans to do so. For those producers who have their hedges in place, we would continue to stay hedged.

The wheat market sold off in the last 10 minutes of the session, finishing down 7 cents in the July Chicago contract. Wheat continues to struggle based on the fundamentals that are in place as well as outside markets. As previously mentioned, we have been hearing that farmers out west are beginning to ramp up corn sales to make room for the upcoming wheat harvest. If you are a wheat producer who has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Please call your broker to see if this is a strategy that can benefit your operation.

Week Ahead Commentary 6/1/10

Jun 01, 2010

The last day of the month proved to be a rough one in the corn market as December corn finished 13½ cents lower at $3.80. On the week the December contract lost 5¼ cents. End of the month book squaring was a prevalent theme as traders were unwilling to go home long over the three-day Memorial Day holiday. In our opinion, we still appear to be in a range bound trade for corn as we have continuously seen farmer selling as we approach the $3.90-$4.00 area. Export sales were slightly lower than the previous week and this caused a bit of resistance whenever the market tried to rally. We are hearing reports out of the West of farmers who are selling corn to make room for the upcoming wheat harvest. This will continue to put pressure on the corn market as we go forward. Looking ahead to the weather situation, it appears that we will have favorable planting weather for the better part of the weekend with a system to roll through the Midwest early next week. We should continue to see progress with already planted crops and also areas that need to catch up. If the weather stays good through pollination, we will likely see December futures trade under $3.50 and head even lower toward harvest. If the weather turns for the worst here in the U.S. and/or in China this growing season, we should see corn prices find a bottom in the coming months. I still think we are positioned well at this time. For those producers that still need to get caught up on the hedge recommendations that we have issued, please call your broker and discuss the available plan for your operation.

On the heels of a weak Census crush report and low export sales, November beans finished the last trading day of the month down 11 cents, 9.07¾. For the week, beans actually picked up ¼ of a cent on the buying that came in early in the week. Based on the fundamentals that we have right now, we feel that the bean market may be susceptible to a further break from these levels if the weather continues to hold. The record South American crop continues to come online and global stocks this fall will be 45% larger than last year. We will still have to grow a crop here in the U.S., obviously, but if we do have trendline yields, we could see much lower prices this fall. A lot can change (and usually does!), but if you are not caught up on sales, I would look for a rally back toward $9.30-9.50 in November soybeans to do so. For those producers who have their hedges in place, we would continue to stay hedged. For the producers who still need to protect new crop bean sales, please give your broker a call to discuss the available strategies that we have.

 

The wheat market continues to struggle based on the fundamentals that are in place. For the week July Chicago wheat finished 14¼ cents lower at $4.57¾. As previously mentioned, we have been hearing that farmers out west are beginning to ramp up corn sales to make room for the upcoming wheat harvest. If you are a wheat producer who has the ability to store your wheat, we have been discussing strategies to sell deferred futures and store the wheat in order to take advantage of the carry that is in the market. Please call your broker to see if this is a strategy that can benefit your operation.
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