Sep 20, 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 Closing Grain Commentary 9/24/10

Sep 24, 2010

Grains rallied sharply today after Rueters reported that Calstrs (California State Teachers Retirement System) might be investing $2.5 billion in commodities over the next 3 years.  December corn finished 22 ½ cents higher at $5.21 ¾.  November beans finished up 32 ½ cents and December wheat finished up 22 ¾.

This strength was also attributed to strong outside markets after a strong manufacturing report which came out this morning before the open. Crude oil was up over a dollar higher and the US dollar hit new lows for the move.  The trend still remains bullish for corn/soybeans and with new money flow coming in like this it is going to be hard for the market to find resistance. 

I have included a crush chart below.  The price falling illustrates that demand for the products isn’t keeping pace with the soybean futures. This is probably a reflection of the huge inflows of investment money flowing into our markets.  The 2011 corn strategy we had put in place a couple of days ago will help catch upside potential for these types of rallies.   

Quantitative easing, selling of the dollar, and buying of treasuries and commodities have really been the main driving factor behind this rally.  It is just money chasing money at this point.  It makes grains more volatile and at the same time less likely to be sustainable at these prices.

Open interest continues to climb, we still haven’t hit record levels yet but we are close.  Next week we will be at the end of the month/end of the quarter.  Many technical support levels still remain well below current prices so we recommend staying adequately hedged.  If you would like to get more protected please call your broker to discuss current strategies.

 

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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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