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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 2-10-2012

Feb 10, 2012

Grains finished mixed with March corn down 5 ¼, March soybeans up 1 ½ cents, and March wheat down 16 cents.

Wheat broke some resistance levels on more follow through selling after the report.  In the end the new crop corn and new crop wheat had the largest price drops.  The 2012 new crop corn/bean ratio is the highest it has been since July of last year.  The market is obviously expecting more corn acres and is acting accordingly ahead of time.  World wheat supply is certainly weighing on the US market as we found follow through selling from yesterday’s report.

USDA Report:

The USDA report didn’t reveal much difference from the market’s expectations.  The few main differences that I see are a higher world wheat carryout and smaller reductions than expected for South American production.  Total corn production combined between Argentina and Brazil was estimated by the market to be down about 5.1 MMTs and the USDA only reduced it by 4 MMTs with a total of 83 MMTs expected. 

Some analysts have been calling for much larger production cuts.  Our thought is we have passed the critical risk time period and have had regular rains since, so we don’t expect further mark downs from the USDA anytime soon.

The world wheat carryout seems to continue to grow.  This is a looming competitor to our corn exports and should continue to put a cap on corn so long as we still have feed options in the world.  Combine that with lower cattle numbers and record ethanol stocks and we have a potential to keep demand increases limited this year.  The market that really needs to keep acres is corn and as long as it gets the 94-95 million acres that we think it can, the long term price risk remains.

Report Highlights:

US corn carryout – 801 million, expected 790, Jan report – 846

US bean carryout – 275 million, expected 270, Jan report – 275

US wheat carryout – 845 million, expected 860, Jan report – 870

Argentine corn production lowered to 22 MMTs, ave guess at 22.3, Jan report at 26

Brazilian corn production at 61 MMTs, ave guess at 59.6, Jan report at 61

World wheat carryover 213.1 MMTs, Jan report 210

World corn carryover 125.4 MMTs, Jan report 128.1

Argentine bean production lowered to 48 MMTs, Jan report at 50.5

Brazilian bean production lowered to 72 MMTs, Jan report at 74

For our customers in the Northern IL areas, we will be speaking next Monday, February 13th at the 2nd Annual Agricultural Outlook Meeting. .  The meeting is sponsored by EHedger, First Midwest Bank, and Beck’s Hybrids.  Gary Schnitkey from the University of Illinois will be speaking as well as other industry professionals including Dan Dempsey from EHedger who will be discussing the brand new AMMO farm management software.

 

Breakfast Meeting

Will County Fair Atrium

710 West St.

Peotone, IL  60468

Registration begins at 8:30am and Breakfast Served at 9:00am

 

Dinner Meeting

Pour Richards Tap & Restaurant

210 Tremont St.

Odell, IL  60460

Registration begins at 5:30pm and Dinner Served at 6:00pm

 

Please R.S.V.P by Friday February 10, 2012

to Maggie Robisky 815-941-3725 or Email: maggie.robisky@firstmidwest.com

 

 

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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