EHedger Closing Grain Commentary 4/6/2010

Published on: 17:51PM Apr 06, 2010
Market Settlement Change Low High 
May corn 346 1/2  3/4 344.25 349.75
May wheat 463 1/2 10    448.75 470
May beans 944 1/2 8 1/2 932.75 944.75
May soymeal 263.10 1.90 260.5 263.8
May soyoil 39.77 0.42 39.03 40
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Grains closed higher on the day. Today’s action looked to be the result of short covering, especially in the wheat market which led the gains. Winter wheat conditions were 65% good to excellent vs. 43 % last year in the first crop progress report. Also, Iraq purchased a large volume of wheat, but most of the sales were from Russian and Canadian sources. This shows that US wheat still remains uncompetitive on the world market and that our abundant supplies need to be worked through. However, with funds holding record amount of short positions futures will still be subject to short covering rallies. We continue to recommend storing wheat and selling forward into the premiums. 
The focus on corn and soybeans has turned to weather and this Friday’s USDA supply/demand report. The expectations are for increased corn ending stocks and soybean ending stocks of 20-50 mil bu.  This is due to the 60 mil bu of soybeans found on the March 1 stocks.  The latest weather forecasts call for showers midweek and early next week with precipitation increased in the northwest Midwest. Yet, there have been reports of field work and corn planting since last Thursday. While the Midwest still has concerns over wet spots it does appear that we are off to a good start this year. If prices continue lower it will provide us with a unique opportunity, especially in corn, to sell puts against our insurance levels and sold bushels. This will lock in revenue should insurance pay at year’s end or help pay for your initial insurance premiums. Please call us with questions regarding this outlook.
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