Jul 31, 2014
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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 3-6-2012

Mar 06, 2012

Grains were mixed today with soybeans finishing strong while corn and wheat were both lower.  May corn settled 6 ¾ cents lower at $6.54, May beans up 10 ¼ cents at $13.35 ¼, and May wheat down 14 ¼ cents at $6.57 ¾.

Initially we found weakness across the board to start the day as the outside markets were sharply lower.  The concern that investors will fail to reach a decision on the Greek bailout before Thursday’s deadline was the headline for the largest decline in the stock market for 2012 so far.  This helped move energies, gold, grains, and other commodities lower while the US Dollar pushed higher.  The soybean market found support mid-morning though and eventually traded back to yesterday’s highs on heavy bullspreading.

 

Yesterday corn was strong while soybeans were weak and today we have switched roles.  Even with this change we have more and more bull spreading going on.  The market seems to be building a position ahead of the upcoming Supply and Demand report.  The May – Dec corn spread settled at +90 ½ cents today and the May – Nov soybean spread settled at +42 cents.   The market is obviously concerned over supply shortages for this year and next.  This is all at the same time that we are seeing increases in the weekly ethanol stocks, decreases in weekly ethanol production, and lower on feed numbers.  We will have the weekly ethanol data out tomorrow to see if this trend is continuing.  For beans we have been running behind pace on USDA export expectations.  Many areas are pointing towards higher carryouts than expected for corn and beans but the market doesn’t seem to agree with those assumptions… at least for now.  These market swings can present great opportunities to get caught up on sales if needed.

 

Chart: May12 – Dec12 Corn Spread

 

Chart 3.6.12

 

Chart: Nov12 – Nov13 Soybean Spread

 

Chart 2 3.6.12

 

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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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