EHedger Afternoon Grain Commentary 8-25-2011

Published on: 14:53PM Aug 25, 2011

Grains finished mixed today.  December corn finished a ½ cent higher at $7.43 ½, December wheat 10 ½ cents higher at $7.87 ¾, and November soybeans down ¾ of a cent at $13.92 ¾.

The Pro Farmer crop tour is wrapping up and continues to report variability in the estimated yields.  Yesterday they dropped their IL corn yield estimates by 6 ½ % from their 3 year tour average, and also dropped pod counts.  Today we heard reports of dryness in Northern Iowa into Minnesota.  This has been enough to keep the market supported, but we didn’t rally much today.

In the mean time gold has had a $200 move in 2 days, and the Dow Jones was sharply lower today.  Fed Chairman Ben Bernanke is expected to speak tomorrow, and we may see some large swings in the currency markets which may broadly affect commodities.

Export sales were out this morning and are as follows (in 1000’s of MTs)

                                             Estimated Range              Actual  

Corn                                      500-700                           536.1 –as expected

Wheat                                  450-750                            657.6 – lower than expected

Soybeans                              750-900                           347.1 – lower than expected

Source: Reuters

The crush numbers were in line with estimates this morning, but the meal stocks were higher than expected.  Despite this meal finished higher today while oil finished lower.  You can see by the Commitment of Traders report that the funds have started to get short oil and this may be just a positioning response.

Heading into the end of the week traders will be watching what the latest crop tour data says.  We are still supported by supply concerns while it is still a big question of how high demand will remain at these levels.  Corn has some room to ration demand from the USDA estimates.  Beans are tight but could have some leeway in the exports if S. America has a decent crop this winter.  For now we want to remain with sustainable positions.  If you have extra bushels you are expecting and want extra coverage, we have some strategies in place to protect these levels. 

Please call your broker for details.

Best Regards,



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