EHedger Afternoon Grain Commentary 8-29-2011
Aug 29, 2011
Grains finished mixed with soybeans leading the way higher. November soybeans finished 23 ½ cents higher at $14.47, December corn 3 cents higher at $7.70, and December wheat down 2 cents at $7.95.
Soybeans continue their rally on dry weather concerns and continued technical strength after breaching a major trading range they have been stuck in. If weather remains dry we could see much of the bullish attention switch to soybeans as carryout concerns start increasing.
Today’s crop conditions report was "bullish" again with declines in the ratings for both corn and soybeans. We could see some strength on the overnight session from these numbers.
Corn August 29th 5 year average
Dough 88% 85%
Dented 53% 54%
Mature 9% 11%
Condition: Down 3% from last week at 54% good-excellent
Soybeans August 29th 5 year average
Setting pods 93% 94%
Dropping Leaves 2% 6%
Condition: Down 2% from last week at 57% good-excellent
I have included a chart of December corn with that shows the next trendline resistance level around $7.86. With all of the crop downgrades recently the market seems to be targeting the all-time high around $8 for corn. With corn and soybeans trying to ration demand, we can see short covering also take us higher. Ultimately high prices can be an "end" to high prices if we ration enough demand, but with supply still in question the market seems to want to stay supported. We want to stay in sustainable positions and stay well hedged at these levels. Soybean calls are still a good way to get upside protection in this market. If you are expecting bushels over and on top of your guarantee level and want to look at protecting these prices we have strategies available. Please give your broker a call.
Have a great week!
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