AGMASTER
9/14/11

William D. Moore
312-264-4337
wmoore@pricegroup.com

DECEMBER CORN

The much anticipated USDA September Supply & Demand report delivered favorable Production #’s of a 12.497 Billion Bushel Crop (EST. – 12.505, 2010 – 12.447) – the Average yield was 148.1 (EST. 148.8, 2010 – 152.8)!

However, the demand #’s were reduced resulting in higher domestic and world Carry-out – still the market managed a higher close on report day!

But the following day, December Corn was hit hard as early yield reports in southern Iowa and central Illinois were 25-30 bushels an acre above estimates – of course, the Early harvested crops normally yield the best!

So even in a short-crop year, the market is vulnerable to harvest pressure. But Underpinning every break is the inescapable fundamental reality that ending stocks This fall is at 15 year lows

Very strong Thursday exports at 1.668 MMT (400-700) could not stem the harvest pressure Slide as the market tested the psychological $7.00 area. It may take the October Crop Report And actual harvest results to confirm what we think will be closer to a 12.0 crop than a 12.5 crop.

This coupled with critically low carry-over stocks and an 80 cent break off the highs creates A low-risk buying opportunity best fulfilled with at-the-money December call spreads!

NOVEMBER BEANS

November beans was assaulted by a triple whammy this week

1) A negative September Crop Report showing an increase
2) Thursday Exports coming in under the estimates at
351 (400-600)
3) A well-chronicled frost that wasn’t as severe as anticipated

This plus early harvest pressure has dropped the Beans about $1.00
Off the highs – with the crop predicted to come in at least 10% under
2010 and ending stocks historically tight, we still recommend at-the-money
November call spreads, just in case!

DECEMBER WHEAT

December wheat has received a boost from the government and the weather:

1) The USDA’s Farm Agency issued a slight increase in the “spring wheat prevented plantings” To 100.000 – 200,000 acres
2) Also, the historic drought in the Winter Wheat areas is expected to curb plantings

In the coming month December wheat has felt the pressure of its slumping sister markets, corn & beans but it might consolidate in front of the inception of WW planting – stand aside for now!

Questions? Ask Bill Moore today at 312-264-4337

Free – Subscribe to receive Weekly Newsletters via Email