EHegder Closing Grain Commentary 10/28/10

Published on: 15:29PM Oct 28, 2010





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Thursday corn and soybeans were higher with wheat again leading the way sharply higher.  The US dollar was sharply lower throughout the day and it was surprising to see modest gains in corn and soybeans with the dollar down over 900 points.  At settlement December corn was 1 ¾ higher, November beans were 1 ¼ higher, and December wheat was 15 ½ higher.


Weekly exports were in line with estimates for corn and wheat, but were once again strong for soybeans due to strong Chinese demand.  Soybean exports were 2.025 million metric tons, 1.37 of which was contracted to China.  November beans reacted early to the news but were unable to hold the strength and finished only slightly higher.


There has been recent speculation circulating the market that China will start buying US corn.  Corn has already been bullish from weak production in the US so if we see a spike in corn demand from China it would be considered very bullish. Soybean demand has been strong but much of this demand has already been projected.


Wheat was the upside leader again today.  The funds have been net short Chicago wheat against net long corn and soybean positions.  They are likely exiting many of these positions after the latest crop conditions report showed winter wheat at only 47% good to excellent compared to 62% this time last year.  Over the past week wheat has been at its cheapest levels compared to corn and beans for a long time so it didn’t take much for those spreads to reverse.


Between now and the next WASDE report (November 9th) we like staying well protected in cash sales and have our upside potential in spring call spreads.  Please call your broker if you still need to get the spring call spreads on.