EHedger Afternoon Grain Commentary 10/29/12
Oct 29, 2012
Grains sold off from what appears to be liquidation while New York is shut down from the hurricane. December corn closed ¾ of a cent lower at $7.37, November soybeans down 34 cents at $15.27 ¼, and December wheat down 5 ¾ cents at $8.58.
The Stock Market, Nymex floor, and equity futures at the CME were all shut down today due to Hurricane Sandy. The economic repercussions of the storm may have been enough to force a "risk-off" trading session in other markets as we saw crude oil and grains lower while "flight-to-quality-assets" like the US Dollar and Treasuries were higher.
The USDA was shut down today as well but they still managed to release the Export Inspections Report at 10:00 am. Soybeans were well above expectations again at 63.35 million bushels. Corn was at 15.51 million and wheat was at 9.70 million. Even though this was friendly to soybeans they still led the CBOT markets lower. Northern Brazil is expected to get some much needed rains to help with their recent dry spell, but this isn’t a major market moving change in my opinion. The USDA apparently wasn’t able to release the Crop Progress Report in the afternoon. We will notify you if that comes tomorrow afternoon.
Safras is estimating Brazilian soy planting at 28% complete compared to the 5 year average of 24 percent. The Argentine Ag Minister is estimating their corn acres to be 40% planted which compares to 55% at this time last year. In fact this is their slowest planting pace at this time of year in more than 15 years. Currently the USDA is estimating Argentine corn production at 28 MMTs which is about 3.34% of total expected world production this year.
As of Monday October 29th the average price of December corn in Oct has been $7.50 ¼. The average price of November soybeans has been $15.39. We are through 21 of the 23 business days which decide the harvest price for insurance, which basically means we can’t significantly change this price from here. With the fall crop insurance price set and your yields basically known it is time to re-evaluate hedge levels to see how to protect downside risk going into the winter. Please contact an EHedger broker to see how we can help you develop a strategy to finish out 2012 and look forward to the 2013 crop year. Phone: (866) 433-4371. Have a great week!
Chart: December Corn (Red-50 Day Moving Average, Blue-100 Day MA, Grey-200 Day MA)
Chart: November Soybeans (Red-50 Day Moving Average, Blue-100 Day MA, Grey-200 Day MA)
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