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EHedger Closing Grains Commentary 8/10/09

Published on: 17:09PM Aug 10, 2009
 
SETTLEMENTS 7/10
         
 
Sep 09 Corn
324 ¼  
+ 2 ¼ 
Dec 09 Corn
330 ½
+ 4
Aug 09 Beans
1170 ½  
- 14 
Nov 09 Beans
1010 
- 28 ½  
Sep 09 Wheat
494 ¼  
+ 4 ¾
Sep 09 KC Wheat
526 ¼ 
+ 1
Sep 09 Min Wheat
575 
+ 1 ¾ 
Dec 09 Meal
305.7
- 13.3
Dec 09 Oil
37.20
- 0.29
 
 
 
 
 
 
 
 
 
 
 
 
 






Grains Close: Corn Rebounds On Short Covering
 
  • Corn Bounces, Soybeans Break On Position Shuffling
  • Wednesday’s USDA Report Eyed
  • Weather Still Friendly For Crop Development
 
Overview:
 
Dec corn reversed its recent tide Monday and closed out the day 4 cents higher – it’s first positive close in five trading days. Position juggling ahead of Wednesday’s USDA report was the main driver behind the firmness, and more could be seen overnight and Tuesday.
 
Overall, the USDA is expected to unveil a smaller corn planted acreage figure on Wednesday in response to its acreage resurvey in Illinois and other growing areas. However, in our opinion the market has moved on from worrying about the amount of planted acres, and is now much more interested in the size of the potential yield. After all, growing conditions since our late start have been very good, and there’s a strong chance that several key regions will produce record yields if conditions stay non-threatening for the rest of August.
 
So, if the USDA does indeed peel back corn acres, and the corn price rallies as a result, we strongly recommend that producers use such strength as a fresh selling opportunity as such gains will likely prove short lived.
 
Nov soybeans suffered a heavy setback Monday as traders unwound long soybeans versus short corn positions ahead of Wednesday’s USDA update. Given that the beans are liable to gain additional acreage in the USDA numbers, the softer tone of the bean price is no surprise, and we expect additional weakness in the sessions ahead. That trend may well persist for the next several weeks if growing conditions in the US Midwest remain friendly towards the crop, and overseas buying interest in US beans starts to cool.
 
So, once again, we suggest that producers look to top up hedge positions and sales sooner rather than later in case prices quickly give up their recent gains and return toward 2009’s lows.
 
Chicago wheat prices moved in line with corn, and mainly thanks to short covering rather than fresh buying interest. Wheat remains without a strong bullish story right now and could well encounter fresh selling interest as the month moves on if corn and beans come under renewed pressure themselves.
 
 







 
 
 
 
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