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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.

Pre-Report Comments 1/11/12

Jan 11, 2012

Soybeans finished sharply lower ahead of tomorrow’s USDA reports.  March soybeans fell the furthest, posting a 29 cent loss closing at $12.03.  March corn was down ½ cent at $6.51 ½ and March wheat was up 1 ¼ at $6.41.

Not much has changed in market fundamentals in the past 24 hours besides a little better forecast in South America.  At this point the market may be looking at the rains as more favorable for soybean production and a little late to significantly boost corn production.  It may also just have been a massive unwinding of short corn, long beans spreads.

Along with tomorrow’s USDA reports, we will also see Weekly Export Sales.  These will almost surely be overshadowed by the report, but I just want to mention them. Expectations (in 1000’s) are for 300-600 MTs of corn, 300-575 in soybeans, and 200-400 in wheat.

Looking at the most recent Commitment of Traders report, we can see that the "Managed Money" is net short 27,097 contracts of Chicago wheat, net long 192,500 of corn, and net long 33,020 contracts of soybeans.  This is still an especially large net long position in corn and all the more reason to make sure as a producer you have adequate DOWNSIDE coverage if the reports were to come out bearish.  The reports will be the best indication for direction to start the year and has caused significant market swings in the past.

I have included the market expectations below.  If there are any surprises on the stocks data, our thought is that it will be on the amount of wheat being fed, or the rationing of corn demand from these high prices.  We will have our reaction to the reports in the morning letter and morning automated phone calls. 

Report estimates are as follows (source Reuters):

Corn

Production range: 12.165 - 12.375

Average guess: 12.265 with a 146.163 yield

December USDA: 12.310

Soybeans

Production range: 3.010 - 3.200

Average guess: 3.048 with a 41.358 yield

December USDA: 3.046

 

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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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