EHedger Closing Grain Commentary 9-8-10

Published on: 17:53PM Sep 08, 2010

It was a fairly uneventful day in the grain markets as everyone awaits the Supply and Demand report from the USDA on Friday morning at 7:30am. Corn and beans settled lower with December corn finishing 3 ¾ lower at $4.62 ½ while November beans were 3 ¼ lower at $10.48 ¾. The downside leader was Chicago wheat which settled the day 24 ½ lower in the December contract at $7.11.

This morning Stats Canada released a report that showed higher than expected stocks for Wheat and Canola. This contributed to the sell-off in the wheat market and helped push Canola six dollars lower. For the most part everyone is waiting to see what the USDA report will say and the markets will likely continue to chop around until we have this new data.  With only 6% of the corn crop harvested it is still hard to determine what the final yield will be.  We should have more accurate information this week after many producers will be deeper into harvest. I am still convinced that everyone is ready for a bad corn yield number on Friday.  These are levels that are profitable for most producers, in our opinion being adequately hedged at these levels is a good idea. (see hedge recommendations.)

This morning the USDA announced the sale of 115,000 mt of US Soybeans to China for 2010-2011 delivery. The bean market traded higher early in the session before finishing 3 ¼ cents lower. In our opinion the bean market is solid throughout the majority of the corn-belt. For those producers that need to catch up on sales these levels appear attractive to us. Please give your broker a call if you would like to look at strategies to protect these levels before the report on Friday.


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