EHedger Afternoon Grain Commentary 9/4/12
Sep 04, 2012
Grains finished higher but with heavy "bear-spreading". December corn closed 5 ¼ cents higher at $8.05, November soybeans up 11 ¾ cents at $17.68 ¼, and December wheat down ¾ of a cent at 8.88 ¾.
In my opinion the most significant of today’s moves is the loss of premium November is seeing to the differed months. Take for example the following chart of the November 2012 – March 2013 soybean spread:
Today November gave back 16 cents to March, 21.5 cents to May, and 25.75 cents to July. The fundamentals seem to have turned as the market realizes most producers aren’t willing to store beans until March for a $1.52 less than they can get out of the field! You also have the fund rolls coming up. As producers contract to sell their soybeans off the combine and the managed money roll their long bean positions to the back months we have started to see that front month premium wither. We also saw a drop in CIF soybean basis today which added to that pressure.
Export inspections were 6.37 million for corn (expected 13.5), beans at 15.12 million (expected 12.5), and wheat at 25.44 million (expected 12.5).
After the market closed the Crop Progress Report showed corn at 10% harvested and 41% mature. Corn and soybeans had no change to their good-excellent crop ratings. Soybeans are slightly ahead of schedule at 19% "dropping leaves" compared to 9% as the 5-year average. Overall there was little change from expectations and shouldn’t cause much change of opinion for tonight’s opening trade.
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