EHedger Closing Grain Commentary 9/16/10

Published on: 15:43PM Sep 16, 2010


Markets overall weaker but corn managed to hold support and settle higher.
Egypt cancels 263,700 mts of US old crop wheat as well as 110,000 mts of US new crop wheat
This morning's export sales were below expectations for wheat and at the low end of the ranges for corn and beans.
Concerns about Canadian frost tonight.
December corn opened the day weaker but steadily rallied back towards the $5 level. Exports were at 587,900 mts which is at the low end of estimates. This on top of weaker outside markets kept corn weak for the morning session until rallying off its lows going into the afternoon trade. There were two new estimates of the Chinese corn production. CNGOIC estimated the Chinese national crop at 169 million mts (a new record). The other estimate was from JCI for 159 million mts, while the USDA is estimating 166, so obviously a wide range between the estimates.
Until the market is convinced that corn yields aren’t going down we should continue to see the market supported on any kind of setbacks. We are probably starting to ration some demand up at these levels but with only a billion bushel carryout we can’t afford the yields to go down much.
Soybeans traded lower today finishing 6 ¾ lower for November. The USDA announced the sale of 170,500 mts of US soybeans to China for 2010-2011 delivery. They also announced the sale of 67,000 mts of US soyoil to an unknown buyer for 2010-2011 delivery. Export sales were at 668,000 mts which is at the low end of estimates.  Soy meal export sales were actually negative 58,100 mts for this year which helped beans/meal’s weakness today. Canola futures rallied today on concerns of frost in Canada tonight.
Wheat was the downside leader after announcements of Egypt’s cancelled orders.  December Chicago Wheat was down as much as 15 ¼ cents a few minutes before the close but ended up down only 7 ½. This late rally came in meal as well and was likely due to the Canadian weather concerns.   
We are approaching the end of the month and end of the quarter. There is also a stocks report on Sept 30th. We could easily see profit taking going into this time frame so we recommend staying adequately hedged. We like staying with our current positions. If you need to get caught up on sales, or get additional protection, please call your broker to discuss current strategies.


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