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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.

Fieldwork Pressures Prices Lower

May 15, 2013

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Grain markets settled lower Wednesday after a choppy double sided trading session.  December corn closed 6 ¼ cents lower at $5.31 ¾, November soybeans 4 ¼ cents lower at $12.09 ¾, and July wheat down 17 cents at $6.93 ¾.  Now that the May grain and oilseed contracts are off the board, the ongoing fieldwork is starting to put downward pressure on crop prices.

As we climb the wall of worry we are getting past the obstacles that have keep a premium in new crop prices.  A lot of the points we have talked about are starting to catch steam.  We can all worry about late planting but when it gets to be 80 degrees outside soil moisture has been recharged, the rains can suddenly turn from a bullish story to bearish.  We have talked to many producers and industry contacts that have caught up or are nearly finished planting and it is still only May 15th. The next crop progress report should show a large jump in planting progress.  December corn prices look poised to test their lows again in the near future.

December 2013 Corn Daily Chart – 5 and 34 day simple moving averages and exponential oscillator

December 2013 Corn

Meanwhile November soybeans continue to find support near the $12.00 level.  NOPA crush was only 120.11 million bushels which proves that domestic demand is still being rationed at these prices.  The July –November soybean spread continues to have wild intra-day swings settling just above a $2 premium today (see chart below).  If we are importing South American soybeans and crush is slowing down, we could see this spread start to remove some of that premium.

July-November Soybeans 15-minute barchart – green line is prior day’s settlementJuly-November Soybeans

For now we want to stay the course with an emphasis on downside protection hedges.  If you would like to receive the EHedger grain commentary including complete hedge recommendations, please sign up using the link.

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EHedger is a premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.

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