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 4/30/12
Apr 30, 2012
Grains traded mixed to lower for most of the trading session until after 1 pm when they got a strong rally to close out the month. July corn finished 8 ¾ cents higher at $6.34 ¼, July soybeans 12 cents higher at $15.05 ½, and July wheat 4 ½ cents higher at $6.54 ½.
For the month July corn dropped 9 cents, July wheat dropped 19 ½ cents, and July soybeans gained 97 ¼ cents! The "managed money" heavily reduced their net long corn position during this timeframe while slightly adding to their net long soybean position. We also had favorable old crop sales for soybeans during this timeframe. Corn had favorable sales data as well, but with the managed money liquidating approximately 50% of their net long position in corn which made it hard for corn to gain any ground. There is also plenty of hedge pressure above these levels for new crop corn. The May – July corn spread did take the market by surprise last week with a sharp rally to well over +20 cents! When looking at flat price though, it obviously didn’t equate to July having a net positive month.
The market obviously started this week out positively but corn may find some resistance on the overnight session as crop progress was ahead of schedule again. It looks like Iowa went from 9% planted last week to 50% planted this week! Nationally corn is now 53% planted while the 5 year average is at 27%. Soybeans are now 12% planted compared to 6% on average, and wheat is 54% headed with a 64% good-to-excellent crop rating.
Favorable rains fell widespread across the Midwest over the weekend bringing moisture to some much needed areas. The forecast is calling for timely rains in the ten day forecast and overall favorable for moisture levels while providing a few dry pockets for more planting progress. The bottom line is that weather is not an issue at this time for the majority of the Midwest.
For now we will continue to watch export sales and announcements for direction in these markets. Today for example we received another sale announcement of 220,000 MTs of new crop soybeans to China and we rallied 19 cents in Nov beans. We obviously can see that the funds have deleveraged corn and are still loaded up with long beans. This will make getting out of that position interesting when the time comes I am sure. To receive a free trial of the EHedger research including hedge recommendations, please sign up using the link below. Thanks and have a great week!
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