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EHedger Report

RSS By: Dustin Johnson

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

EHedger Afternoon Grain Commentary 10-11-2011

Oct 11, 2011

Grains were wildly bullish today with corn finishing "limit up".  The December corn contract settled at $6.45 (up 40 cents) and was limit up for the latter half of the day.  November beans finished 58 cents higher at $12.35 ½ and December wheat 49 ¼ cents higher at $6.60 ¾.

The fact that we have been severely oversold in grains over the past couple of trading sessions caught up to the market, especially being a day away from the report.  When we crossed the short term highs and traders had to start jumping out of short positions and buy-stops were triggered the market rallied further.  Also, we have been discussing the 200 day moving average in corn being a significant level to make additional sales which is right at $6.45 ½.  We rallied right to this level today and intrinsically traded just above it (see chart). Besides that there were no major news headlines to warrant such a rally today.

Crop progress was delayed until this afternoon and came out as follows:

Corn                                                              October 9th                         5 year average

Mature                                                                 89%                                        88%

Harvested                                                           33%                                        32%

Condition:  Good-excellent gained 1 percent week-over-week now at 53%.

Soybeans                                                         October 9th                         5 year average

Harvested                                                           51%                                        46%

Condition: Good-excellent gained 2 percent week-over-week now at 56%

Winter wheat is now 59% planted which is behind the 5 year average of 67% at this time of year.  It is 28% emerged compared to 38% on average.

The USDA Supply and Demand report will be released tomorrow morning at 7:30 am. The trade estimate for the 2011-2012 wheat ending stocks figure is 747 million bushels versus 761 million bushels a month ago. The corn production estimate is 12.492 billion bushels with a yield of 148.9 bpa (12.497 billion last month; 148.1 bpa). The corn ending stocks are estimated to be 795 million bushels versus 672 million bushels a month ago. The soybean production estimate is 3.094 billion bushels with a yield of 42.0 bpa (3.085 billion bushels last month; 41.8 bpa). Soybean ending stocks are estimated to be 181 million bushels versus 165 million a month ago.

We will have the report results and our reaction in tomorrow morning’s letter and automated phone call.  Please call in if you would like to discuss the report. 

Chart 10.11.11 

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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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