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December 2011 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.

EHedger Afternoon Grain Commentary 12-30-2011

Dec 30, 2011

Corn, Soybeans, and Wheat all saw significant gains in today’s trading session with Soybeans leading the way.  Dry weather conditions out of South America continue to support the grain markets heading into the long holiday weekend.  March Corn settled 8 ½ higher at 6.46 ½.  March Soybeans settled 10 ¾ higher at 12.07 ¾ .  Wheat settled 7 ½ high at 6.52 ¾.  Forecasts have reduced the amount of anticipated rainfall over the weekend for parts of Southern Brazil.   Argentina’s near term forecast remains mild and dry.  Argentina isn’t expected to receive significant precipitation for 12-15 days.

This morning's USDA Weekly Export sales were somewhat disappointing for corn at 318k MT.  Soybean export sales were in line with most estimates at 662k MT.  Wheat exports were in line as well at 431k MT.

The next major USDA report will be released January 12th at 7:30am. This report will involve grain stocks, supply/demand and production, and also winter wheat seedings. We will be releasing our estimates for this report in the next week or so. Our major suggestion is that everyone gets in touch with their broker to go over our current recommendations and also be sure that AMMO is updated so that we are well positioned for this critical report.

There will be no overnight trading session over the weekend.  Trading hours will resume on Tuesday morning at 9:30 a.m.  Please call your broker with any questions regarding the holiday trading schedule.

EHedger hopes you had a wonderful 2011 and looks forward to a great 2012.  Happy New Year!

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

EHedger Afternoon Grain Commentary 12-29-2011

Dec 29, 2011

Corn, soybeans, and wheat all finished the day lower as the mid-day weather run called for a wetter weather pattern for Argentina in the 6-10 day time period. Brazil appears to be receiving much needed rains for the rest of this week into the weekend. The grain markets were trading higher early in the session before the weather reports came out. March corn ended up settling 4 ½ lower at $6.38. January soybeans settled 10 ¾ lower at $11.87 and March Chicago wheat finished trading 6 lower at $6.45 ¼.

There wasn’t anything outside of weather that was fresh news today. Weekly US Ethanol production was released and ended up being a new high for the year. It appears to us that blenders are all rushing to take advantage of the credits before they expire at the end of the year. It will be very interesting to see what happens to production after the first of the year. The trade continues to get thinner as we head into the last trading day of the year tomorrow. Weekly export sales will be released tomorrow morning at 7:30am due to the Christmas Holiday. Corn sales are estimated to be between 350,000MT- 550,000MT. Soybean sales are estimated to be between 300,000MT-400,000MT. Wheat sales are estimated to be between 200,000Mt-300,000MT. Tomorrow is the last trading day for December live cattle and also the first notice day January grain futures.  Please contact your broker to re-position any hedges involving these contracts.

The next major USDA report will be released January 12th at 7:30am. This report will involve grain stocks, supply/demand and production, and also winter wheat seedings. We will be releasing our estimates for this report in the next week or so. Our major suggestion is that everyone gets in touch with their broker to go over our current recommendations and also be sure that AMMO is updated so that we are well positioned for this critical report. 

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

EHedger Afternoon Grain Commentary 12-28-2011

Dec 28, 2011

The corn market lead the way on Wednesday as March corn settled the session 9 ¼ higher at $6.42 ½. March Chicago wheat was also higher finishing the day 6 ½ higher at $6.51. The soybean market was sharply lower to open the day before settling 1 ½ lower at $11.98 ¼.

For the second consecutive day corn, wheat, and soybeans all settled above their respective 50 day moving averages. It seems as though most of the trade is focused on continued discussion of hot and dry weather throughout Argentina. This afternoon’s mid-day run called for continued dryness in Argentina for the next week or so. Brazil is forecasted to receive scattered showers starting this weekend into early next week. The long term weather models have been conflicting. In our opinion it is difficult to predict weather much past a week so we will certainly be monitoring daily changes that occur.  As is the case with any weather market, quick swings can be taken advantage of for producers that are looking to catch up on sales. 

The outside markets were very weak throughout the entire grain session as the Dow was down over 120 points and crude oil was trading almost $2.00 lower. It feels like a lot of the trade is winding down as we head into the end of the year and the thin volume should only get thinner as we wrap up the rest of the week. Weekly export sales are delayed until Friday due to the Christmas holiday on Monday. I will release the export sales estimates in tomorrow’s afternoon commentary.  This Friday is the last trading day for December live cattle and also the first notice day January grain futures.  Please contact your broker to re-position any hedges involving these contracts.

The next major USDA report will be released January 12th at 7:30am. This report will give involve grain stock, supply/demand and production, and also winter wheat seedings. We will be releasing our estimates for this report in the next week or so. Our major suggestion is that everyone gets in touch with their broker to go over our current recommendations and also be sure that AMMO is updated so that we are well positioned for this critical report. 

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

Tuesday's Grain Market Recap 12-20-2011

Dec 20, 2011

Grains finished stronger today continuing yesterday’s gains.  March corn was 6 cents higher at $6.07. January soybeans were up 7 ½ cents at $11.44 ½, and March wheat was up 8 cents at $6.07 ¾.

Outside markets were very favorable for grain prices today with the Dow Jones up over 300 points and the dollar down sharply.  Crude oil was over $3 higher as well.  For grains not much has fundamentally changed from yesterday to today so I would put most of the gains on outsides and technical support coming off of oversold levels.  Weather in Argentina is still forecasted to be hotter/drier and seems to continue to be providing support as well.

Technically we are right up against that trendline resistance in March corn (see chart).  A close above this could mean another move up towards the 50-day MA at $6.30 ¼.  For beans we are above the recent trendline resistance and coming off of oversold levels.  We could see the January contract edge closer to the 50-day which is at $11.79.

We are still expecting this week to be choppy and low volume trade as many traders will be out for vacation.  Until we get to the January reports there are not a whole lot of major fundamental news events to be expected.  We want to use these rallies to catch up on hedges if necessary.

Chart: March Corn

Red-50 day Blue-100 day Grey-200 day

 

Chart: January Soybeans

Red-50 day Blue-100 day Grey-200 day

 

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

Monday's Grain Market Recap 12-19-11

Dec 19, 2011

Grains started off with a gap higher open last night and continued to hold strength right into the close of the day session.  March corn was the upside leader and finished 18 cents higher at $6.01. January soybeans were up 7 cents at $11.37, and March wheat was up 16 cents at $5.99 ¾.

A less favorable forecast in Argentina was the main reason for the gains overnight.  Surprisingly, it was corn that ended up the strongest.  It was announced that China has begun replenishing state corn reserves.  This should be supportive for their local prices, but as far as importing from the US, we don’t see this as a likely scenario until they burn through more of their own supply first.  On top of this, the Mexican ag minister said that they would unlikely be importing more corn than expected in 2012 due to a poor livestock sector and "other" feed options (wheat).

Since we are coming off of oversold levels these rallies could have some more technical support coming in behind them.  Soybeans gapped above their recent trendline resistance (see chart) and the next major moving average isn’t until the 50-day at $11.80 (Jan).  The March corn 50-day moving average is at $6.305 (see chart).

This week we could see a choppy, low volume trade as many traders will be out for vacation.  Until we get to the January reports there are not a whole lot of major fundamental news events to be expected.  We want to use these rallies to catch up on hedges if necessary.

Chart: March Corn

Red-50 day Blue-100 day Grey-200 day


Chart: January Soybeans

Red-50 day Blue-100 day Grey-200 day

 

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

Wednesday's Grain Recap 12/15/12

Dec 15, 2011

Grains finished mixed with corn/wheat lower and soybeans higher.  The outsides were mixed with crude oil lower and equities higher.  The main reason for the spike in beans could have just been some unwinding of the long corn, short bean spreads. 

The COT report shows the managed money net short beans and wheat, while corn is the one market they are still largely net long.  If they liquidate it may be the price of corn that continues to suffer the most.

Weekly export sales report for grains from this morning:

                                          Estimated                                                            Actual

Corn                                  400,000 – 600,000 MTs                                   506,900 MTs

Wheat                                300,000 – 400,000 MTs                                   318,400 MTs

Soybeans                           400,000 – 600,000 MTs                                   468,600 MTs

Today’s settlement in March corn was the lowest since March 2011, and we are just coming off the lowest January 12 bean settlement since October 2011!  This is all happening as we are hitting the lowest level the Euro Currency has been since January.  Obviously the currency moves have played a part in this just as the higher than "originally expected" supply is playing a part as well.  With the world corn and wheat carryout going up on the last USDA report, market participants seem to be more comfortable lifting longs and going short.  We still feel that there is considerable downside risk in these markets between now and that March timeframe when the Federal Crop Insurance price levels are set.

South American weather was slightly changed at midday with more favorable conditions for Argentina than originally projected.  There are still areas of drying but for the most part Argentina and Brazil have favorable conditions for crop development at this time.

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Chart: March Corn

Red-50 day Blue-100 day Grey-200 day

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

Tuesday's Grain Market Recap 12-13-2011

Dec 13, 2011

Grains finished slightly higher with March corn up ½ of a cent, March wheat up 6 ¼ cents, and January soybeans up 6 ½ cents.

Outside markets had large swings today but were overall supportive for grains during the trading session.  For one there were rumors that Iran closed the Straits of Hormuz which sent crude oil to almost $4 higher on the session.  About an hour later Iran denied the reports and crude came well off those highs.  We also had the FOMC meeting today which made little to no changes on their statement regarding keeping rates low through 2013 as well as continuing with their "operation twist".  By the end of the day the equities reversed and the dollar strengthened suggesting the overnight trade may be a little bit lower for grains than today’s settlements.

Forecasted rain events in South America do not appear to be providing enough moisture to change the current dryness concerns of the market.  This may bring some additional support in soybeans especially over the next couple of weeks unless the forecast changes.

As we get closer to January we could see some pre-positioning before the 1st quarter rebalancing by the funds. We also have the January Supply and Demand report and Quarterly stocks data coming around the corner and will have estimates as we get closer to the report.

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Chart: March Corn

Chart: January Soybeans

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

Monday's Grain Market Recap 12-12-11

Dec 12, 2011

Grains finished mixed with March corn down ¼ of a cent, March wheat down 1 ¾ cents, and January soybeans up 5 cents.

Dryness in South America is providing some support for beans.  Corn and wheat held resistance into the close which may have been partly due to weaker outside markets as well as continued resistance from the bearish USDA report last week. The December Supply and Demand report showed increases in world carryout for both corn and wheat.  China’s increased production was the main cause for the higher world corn numbers.  For wheat the main increases in production could be found between the countries of Argentina, Australia, and Canada.  These increases only highlight the fact that the world has options for feed products, and this can continue to put downside pressure on these markets.

Factoring in the sharp decline in outside markets today I would say that grains held up pretty well. The Dow Jones futures were as much as 275 points lower on the day and the Dollar was sharply higher.  Crude oil was over $1.50 lower and gold over $55 lower.

As we get closer to January we could see some pre-positioning before the 1st quarter rebalancing by the funds.  We also have the January Supply and Demand report and Quarterly stocks data coming around the corner and will have estimates as we get closer to the report.

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help. You may also sign up for a free trial of our research using the link below:

www.ehedger.com/signup/

Chart: March Corn

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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.

Friday's Grain Recap 12/09/12

Dec 09, 2011

Grains finished lower on a weak USDA Supply and Demand Report.  March corn finished 6 lower at $5.94 ¼, March wheat down 1 at $5.96, and January soybeans down 25 ½ cents at $11.07.

The biggest thing to take away from the report was the larger world corn and wheat supply numbers.  The USDA raised its Chinese corn production estimate by 7 ½ MMTs from their November estimate.  For wheat the main increases in production could be found between the countries of Argentina, Australia, and Canada.  These increases only highlight the fact that the world has options for feed products, and this can continue to put downside pressure on the market.

Until the Quarterly Stocks and January Supply and Demand reports we could see this market continue to have a hard time holding any rallies.  We have been looking at some relatively inexpensive March calls just to take us through the reports for upside potential on our hedges.

Weather in South America improved slightly today with important rains coming to some of the drier areas of Brazil.  Drying is expected to resume in parts next week and we may see some support come from this if rains aren’t put back into the forecast soon.

Even though today's report was bearish the big reports wont be until January.  Between now and the end of the year is the time to make sure hedges are squared away while there is still risk premium built into the market. As to those reports themselves we will have more estimates near the time they are released.

Please feel free to call an EHedger risk management specialist if you would like a second opinion on your marketing strategy and how we may be able to help.  You may also sign up for a free trial of our research using the link below:

 

www.ehedger.com/signup/

Best Regards,

EHedger

866-433-4371

www.EHedger.com

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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