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EHedger Closing Grains Commentary 11/03/09


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SETTLEMENTS 11/03

Grain Settlement - 11-03

Corn and soybeans closed higher and wheat closed lower.  The grains opened lower this morning after a sharp rally in the Dollar Index overnight.  Corn and soybeans quickly found support however and moved higher.  Heavy inflows of "new money" poured in to the grains all day.  This helped corn prices rally up to $3.96 ½ and soybeans up to $10.18 on the day.  Index funds reportedly bought 20,000 contracts of corn, 10,000 contracts of soybeans and 10,000 contracts of wheat in the final minutes of yesterday's trade.  There was also a lot of volume in corn and soybeans today and this was probably additional Index Fund buying.  As long as this volume of buying continues, it will be hard for prices to break.  With harvest just starting to pick up again, there just isn't enough selling to accommodate such heavy buying.  I was hoping for a rally back to $3.85 in December futures and $10 in November futures this week and we have surpassed those levels today.  I would use these levels to get caught up on sales.  The daily moves continue to be very large and very volatile.  Our markets continue to be caught between several external factors and several fundamental ones.  It is very hard and frustrating trying to predict prices while this is taking place.  As a producer, I would just continue to use these large rallies to make sales so you can avoid the temptation of making sales on the large breaks. Good luck with harvest and give us a call if you have any questions.

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Justin Kelly grew up working on his family's farm in western Illinois, and has been intimately involved in the agricultural industry his entire life. After graduating from Purdue University with a BS degree in Agribusiness Management, Justin was a CBOT member and corn pit broker for Iowa Grain Co. In 2006 Justin went on to lead Iowa Grain's research department. Today as President and Principle of EHedger, Justin applies his hands on experience of both farming and futures trading to helping producers and merchandisers implement solid risk management strategies tailored to their specific requirements.

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