Closing Grain Commentary 9-7-10

Published on: 16:23PM Sep 07, 2010

A very choppy trade today after soybeans hit new highs for the move.  December corn finished up 1 ¾, November soybeans finished up 17, and December wheat finished down 6.

After the long weekend corn, wheat, and beans were all lower coming into the morning session.  The market saw heavy bull-spreading in corn / soybeans. November beans managed to surpass the 2010 high settling at $10.52.  Much of this is pre-positioning ahead of Friday’s report.

Weekly crop conditions were released today instead of yesterday due to the holiday. For corn we are down 1% in the good to excellent category at 69% good to excellent. Soybeans remain unchanged at 64% good to excellent.  Corn is at 33% mature compared to the 5 year average of 19%.

The STATS Canada report comes out tomorrow at 7:30 am, we will have those numbers in the morning letter. Today’s crop progress report shows corn at only 6% harvested (%4 is the 5 year average.)  The market has many "bad" yield reports flowing in, many coming out of areas which are just barely getting into harvest.  The much anticipated Supply and Demand report comes out Friday.  With only 6% harvested it is still hard to judge what the yield will be.  We should have more accurate information flow in this week after many producers get rolling. I am still convinced that everyone is ready for a bad corn yield number on Friday.  This is all the more reason to make sure you are adequately hedged while we are at profitable levels for many producers (see hedge recommendations.)

Today’s bean strength was partly attributed to the sale announcements totaling 90,000 MT of soy oil between Peru, China, and unknown buyers. Soybeans are also likely following corn’s strength. The continual buying everyday is too much for our markets to handle. With the funds holding record long positions in the grains, we are going to have too many futures and not enough grain at this time.

We like our hedges at this time.  Please call us if you would like to get caught up to our recommended levels of sales or would like to look at additional protection ahead of the report.

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