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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 Closing Grain Commentary 3/4/11

Mar 04, 2011

The grain market saw a two-sided trade during the session.   May Corn finished 8 3/4 cents lower at $7.28 3/4. May soybeans finished 2 cents higher at $14.05.  May wheat finished 8 3/4 higher at $8.25.  

 

Before the open the USDA announced a sale of 120,000t of US old crop beans to China.   Also, Informa released world production number today at 10:30. They raised the 2011 Brazil bean crop by 2.1mmt to 71.4 and they raised the Argentina bean crop by 3.0 mmt to 52.0.   Also, Informa dropped the 2011 World corn crop by 1.7 mmt due to lower South Africa and Mexico production.    

 

The USDA S&D report will be released on Thursday and we should see the analyst estimates early next week.  However, the trade still seems to be focused on the March 31 acreage report.  The consensus is that beans going receive the short stick in the acreage battle, which is obviously providing support to the bean market.   However, if we do see large production numbers confirmed out of South America this should take some pressure off the US and potentially help offset a lower acreage number.


Despite the bullish potential of the markets there is still are still numerous factors that could cause grain prices to quickly drop from these levels.  For producers who are behind on cash sales we recommend getting caught up before Thursday's report and re-owning the market using bull call spreads.    

 

Before making any decision producers should get in touch with their broker to go through the strategy in the AMMO Program to see how it will benefit their farm operation.

 

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Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. 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 E Hedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold E Hedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.

 

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