EHedger Afternoon Grain Commentary 8-4-2011

Published on: 08:45AM Aug 05, 2011

It was a sharply lower finish for most asset classes today especially equities with the Dow Jones reaching a 500 point loss at one time.  Grains finished lower with December corn down 11 ½ cents at $7.01 ½, November soybeans down 27 ¾ at $13.45 ¼, and December wheat down 24 ½ at $7.25 ½.

When the US dollar is up 1000 points, crude oil trades at a $5+ intraday loss, and equities are that low, it is hard for grains not to make similar moves.  I will say that corn acted rather strong given the state of the outside markets.  Given a further break in the stock market after the grain close, I wouldn't be surprised to see a further corn setback at the 6pm open tonight.

Weekly export sales were out this morning with no major surprises.  Corn was below expectations while soybeans and wheat were above.

                                           Estimated Range                              Actual

Corn                                     850,000-1,100,000 MTs                  758.6

Soybeans                               450,000-650,000 MTs                      680.2

Wheat                                   350,000-500,000 MTs                      504.1

The August 11th report is one week from today.  We want to remain in sustainable positions, and stay well hedged at these levels.  I wouldn't rule out further weakness from this latest economic setback, we had the same thing happen in 2008.  Please call your broker if you need additional coverage or want to go over your current position.  We have option strategies available that can cover a larger amount of bushels with a minimum bushel level of upside margin exposure.

Best Regards,



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