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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 3/15/13

Mar 15, 2013

 

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A bearish NOPA Crush report caused another price break for old crop soybeans.  Corn and wheat settled relatively unchanged.  No change to the current market outlook, appears old crop pricing will remain range-bound for now.

May soybeans settled 9 ½ cents lower at $14.26 while November soybeans finished 1 ¼ cents higher.  The heavy bear-spreading was a direct result of the NOPA crush which came in 5 million bushels less than the average guess.  Feb crush was at 136.3 million and oil stocks were 2.79 bln lbs.  For the fact that the "managed money" is holding sizable net long soybean/soymeal positions and very sizable net short soyoil positions, it made sense were we closed today –sharply lower soybeans, lower meal, and sharply higher soyoil.  We have seen this same action in wheat, they are massively short and the short covering rally has helped support a small rebound.

 

Corn and wheat are still trading near par which in my eyes will continue to support wheat demand for feed.  Interestingly wheat open interest went down on short covering yesterday while corn had a 23,000+ contract spike, mostly going into the May and July contracts.  We have seen it before when money starts flowing in it can support certain markets regardless of what we believe in opposing fundamentals.  While the wheat feeding story may ultimately result in a higher corn carryout on September first, we want to watch fund position changes.  For now we do expect it to hold its 2013 range with first upside resistance just above where we are now at the 100 and 200 day moving averages of $7.21 ½ and $7.23.

 

May 2013 Corn

May 2013 Corn

 

Our long term outlook remains bearish for new crop pricing and we want to use these "dead cat bounces" to make those additional hedges where necessary.  December corn basically settled on its trendline resistance.

 

December 2013 CornDecember 2013 Corn

 

We want to remain hedged but still allow for plenty of upside should any weather problems arise.  Please contact us with any questions or to review your current marketing plan in our proprietary farm management marketing software - AgYield. Have a happy St. Patrick’s Day!

 

EHedger  |  866.433.4371

Premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.

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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