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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 9-12-2011

Sep 12, 2011

Today’s major focus was on the September USDA Supply and Demand report and like many report days we saw some large moves.  December corn ended up finishing 9 cents higher at $7.45 ½, December wheat down 2 ½ cents at $7.27 ¼, and November soybeans down 29 ½ cents at $14.13.

On the report they ended up lowering the corn yield to 148.1 from 153 on the August report and 148.8 as an average guess.  They are also using one of the lowest ear weights in 20 years and the lowest since 2003. They ended up lowering feed and residual usage by 200 million bushels to 4.7 billion. The ethanol usage was also lowered by 100 million bushels to 5.0 billion. US corn carryout is pegged at 672 million bushels which is lower than the August estimate of 714 but higher than the average analyst guess.

There was a huge unwinding of the beans-corn spread today with soybeans having a large liquidation. The USDA soybean yield estimate came in at 41.8 which was 0.4 bpa higher than the average analyst guess.  With China cancelling 240,000 MTS of 2011-2012 soybeans last week before we even harvest the crop this was a little unsettling for the bulls.

Also today we had crop progress released and is as follows:

Corn                                                   September 11th                     5-year average

Dough:                                                    97%                                       96%

Dented:                                                   84%                                       82%

Mature:                                                   29%                                       33%

Condition: 53% good-excellent which is 1% better than last week.

Soybeans                                               September 11th                 5-year average

Dropping Leaves                                         15%                                        27%

Soybean condition: 56% good-excellent which is unchanged from last week.

Winter wheat is 6% planted vs 10% on average at this time.

Last thing to note, several weather watchers have called for a hard freeze in the upper Midwest for Wednesday, Thursday, Friday.  Take a look at the breakdown of the following states % of dropping leaves:

                                                              September 11th                 5-year average

Minnesota:                                                    9%                                        30%

Iowa:                                                            8%                                         24%

Wisconsin:                                                   15%                                        27%

North Dakota:                                               13%                                       37%

South Dakota:                                               33%                                       43%.

Obviously this is cause for concern it just depends on how cold it gets and how far south it is.  We will have to see how it plays out but this is something that could give soybeans a lift this week.    

If you have any questions or would like to run through your marketing plan again in AMMO please give your broker a call.

Chart 9.12.11

 

Best Regards,

EHedger

For a free trial of EHedger services including the morning automated phone call, daily afternoon market commentary and/or a free consultation, please contact EHedger at 866-433-4371. You can also visit us at 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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