Grains higher to start the week

Published on: 15:16PM Oct 10, 2011

Grains finished the day stronger with December corn up 5 cents, December wheat up 4 cents, and November soybeans up 19 ¼ cents.  With the Dow Jones futures over 250 higher and the Dollar Index 1400 lower, grains were given a lot of outside market support.  At one point corn was 18 ½ cents higher on the day but just like last week grains have been struggling to hold onto any gains.

Due to the holiday, the release of Export Inspections as well as Crop Progress will be pushed to tomorrow.  The next USDA Supply and Demand report will be released Wednesday morning at 7:30am. The trade estimate for Wednesday’s USDA 2011-2012 wheat ending stocks figure is 747 million bushels versus 761 million bushels a month ago. The corn production estimate is 12.492 billion bushels with a yield of 148.9 bpa (12.497 billion last month; 148.1 bpa). The corn ending stocks are estimated to be 795 million bushels versus 672 million bushels a month ago. The soybean production estimate is 3.094 billion bushels with a yield of 42.0 bpa (3.085 billion bushels last month; 41.8 bpa). Soybean ending stocks are estimated to be 181 million bushels versus 165 million a month ago.

Until we actually get the report estimates the market could stay range bound at these levels.  We have seen plenty of liquidation from the funds already.  To see buying resume, we likely need a fundamental shift in demand, or further yield reductions on Wednesday’s report.  Tomorrow will be the last "Day" session to get positions on ahead of the report.  I would only recommend buying back hedges with "defined risk" option strategies for those who are well sold in this market.  If you need more downside protection, please call in to discuss current strategies with an EHedger representative today! 

Chart: December Corn

Red: 50 day moving average Blue: 100 day moving average Grey: 200 day moving average


Chart: November Soybeans

Red: 50 day moving average Blue: 100 day moving average Grey: 200 day moving average

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