It was another choppy day for grains with corn, wheat, and beans all finishing lower. The one market that finished stronger and has been an upside leader lately is May soymeal. December corn finished 9 ¾ cents lower at $5.37, July wheat down 14 ¼ cents at $6.30 ¼, and November soybeans down 11 cents at $13.61 ¾.
For the week, May corn finished 29 cents lower while May soybeans finished 2 ¾ cents higher. The July – November soybean spread was very strong again trading all the way up to an 81.5 cent premium! The market may be preparing for the Nopa Crush report on Monday morning. Otherwise the overall market tone was very negative today with wheat leading the way lower. The US Dollar reversed all of its losses from yesterday and is now trading back above 80.0. Equities and commodities in general traded sharply lower especially after some poor Chinese economic data was released.
For Monday the estimates for Nopa crush are between 141.5 – 143.8 million bushels. This compares to 134.4 at this time last year. Soyoil stocks are expected to be between 2.338 to 2.360 billion lbs compared to 2.242 last month. Monday we will also get crop progress data to show us how much corn we have planted already.
Between now and June the market won’t have a definitive answer of just how many acres switch back to soybeans from corn. There is plenty of hedging waiting to get done above these levels for corn which is keeping December resisted. The most resistance may be found above the insurance level of $5.68. Soybean direction should be extra sensitive to crush and export numbers from here until the next stocks report as the market seems wired to buy it. The "managed money" is holding a massive net long position of 242,673 contracts!!! That’s 1.213 billion bushels of net long positions using futures and options. If we see exports stay strong until September they could keep taking beans higher. If we see cancellations or sales rolled to new crop, it would be very bearish with such a large spec position in these months. We will have to continue to monitor these numbers for direction.
Now is still a great time to double check your 2012 hedge strategy using AMMO to see if there are any changes to be made. To receive a trial of the AMMO software, please sign up using the link below. If you would like to open a hedge account at EHedger, please contact Dustin or Dan at 866-433-4371. www.ammoag.com/signup . Have a great weekend!
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