Outside Markets Driving Grains Higher

Published on: 17:38PM Nov 09, 2009
The outside markets are at it again. Gold is at new highs, while the U.S. dollar is getting slammed and the equity markets are on the positive side. This primal force of bullish momentum was enough to lift the corn market during last night’s trading session and extended into today’s trading session.  

December corn and November beans have bounced off what should be considered important technical support levels today. As long as December corn can remain above $3.60 and January beans above $9.50, it appears the gains could be dragged up by the outside markets even though the crop is being harvested.

We have a monthly supply/demand report this week. Since harvest has been really delayed, there should not be much harvest data in the report. This would suggest there should be no major adjustments on the supply side. One could be expect a bullish adjustment on the demand side because of the general negative tone of the U.S. dollar and potentially expanded exports.

Overall, I suggest producers to be sellers of beans off the combine anytime soybeans can get above $10. I still believe in storing corn because of decent carry incentives. Please remember that, once the market achieves the desired selling target price for the 2010 corn crop, one should focus on keeping hedges in the weakest month. Right now I suggest focusing on selling the July 2010 corn contract above $4.50 and the November 2010 soybeans contract above $10.25.

As for selling increments, I suggest at least a sale of expected corn and sale of ½ of expected soybeans if targets are reached. Also note I am very concerned about first of the year weakness that could possibly develop in all commodities. Try to avoid any type or pricing for corn, soybeans and wheat between January and March if at all possible.
If you need any help in implementing a speculative or hedging strategy give us a call at 1-800-832-1488 or email me at [email protected]
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