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EHedger Report

RSS By: Dustin Johnson

Dustin works with a wide net of large producers throughout the Midwest. His analytical market approach and objective hedge strategy development is specific to the needs of every individual.

FSA Acres Cause Volatility

Sep 17, 2013

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Grain markets closed mixed after trading wide ranges throughout the session.  December corn settled 2 ½ cents lower at $4.54, November soybeans 5 ¾ cents lower at $13.42 ½, and December wheat 1 ¾ cents higher at $6.43.   This morning’s FSA acreage estimates were considered "friendly" for corn, beans, and wheat but the market wasn’t able to hold those gains as the day trade began.

The acreage data was released just after 5 am this morning.  This is a rather odd time to release a government report due to the lack of liquidity so we hope they change this next time around.  FSA data has corn acres pegged at 91.4 million compared to 88.8 million in August.  They had soybean acres at 74.7 million compared to 72.1 last month.  Both of these are obviously well below the current WASDE acreage estimates and the market is left to "project" a final acreage number based on this data.  The problem is there is not enough of a correlation between the WASDE acres and the FSA reported acres to make a confident assumption.  Although the market initially viewed these acres as "friendly" for price action, they sold heavily into the rally causing a sharp selloff.

At about 10:30am Informa released their production estimates.  They have total corn production estimated at 13.80 billion which is just below the current WASDE estimate of 13.843.  They have soybean production pegged 71 million bushels ABOVE the September WASDE report at 3.22 billion bushels.  November soybeans seem to be stuck in a rangebound pattern while the market waits for more yield reports.  If Soybeans break through the bottom end of the range we could easily see soybeans break to the next support near $12.82.  For now the range is still intact.

NOVEMBER SOYBEANSNovember Soybeans

Our market opinion remains unchanged.  We continue to see corn yields flow in better than expected and are looking for a decent corn carryout to take prices lower into the year.  Soybean yields are still a big question and we are waiting for more yield data before making additional cash sale recommendations. Please feel free to sign up for a trial of our commentary to see our current hedge recommendations.  Have a great week!

 

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EHedger is a premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.

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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