For many of the farmers I speak with out in the field, they have very little if any new-crop sold. For those in that position, I believe they have little choice but to get caught up sooner, rather than later, despite my theory that we could see a major unforeseen rally in the next 60-90 days. The problem is "IF" the rally doesn't come to fruition or fully develop, the downside could be too extreme for most producer to handle on 80-100% of their crop, especially, if the following couple of years produced similar results.

As you know, I firmly believe in the fact "risk management" is everything for today's farmer. Losing a finger toe is one thing, but with todays price swings, not properly managing your "risk" could quickly result in losing an entire arm or leg. I have come to the conclusion modern day farming has become very similar to playing in a poker tournament. Take the "World Series of Poker" for example, there is a huge prize purse available for those that can hang in there and make it to the final table...the key however is you have to keep yourself in the game. Look at what happened to farmers in the 80's or even those who were knocked out of the game in the early 2000's, they missed the big crop paydays and the massive land appreciation run, that has occurred the past few years. Very similar to US home builders who got out over the tips of their skis and where knocked out of the housing market, now they are missing the wave back to the upside.

Bottom-line, regardless of opinions or predictions about short-term or long-term market direction, the goal as a producer has to be to keep yourself on the surf board. The problem is as the price waves get larger and larger many producers lose site of their objective, misjudge or solely focus on the current wave they are riding, ultimately underestimate the power of the tides...and more importantly how quickly those tides can change. With this being the case, I prefer to focus on managing "risk" rather than trying to predict the unpredictable. When the waters present themselves with an opportunity for profit, while at the same time reducing my overall exposure and risk of getting knocked off the surf board, I like to take take advantage of that situation. In poker terms, I pulled a few chips off the table and have moved one step closer to the final table. Bottom-line, Yes, make sales now if you haven't done so. Lock in profits and reduce your risk of getting knocked out of the game!

CLICK HERE to get more of my insights on how the game is changing!!!!

Goldman Sachs pointed out yesterday that the strong correlation between the US stock market and commodities, that has taken place for the past decade, looks to have come to a screeching halt. If you recall, back in Oct 2007, the last time US stock market was soaring to new highs, commodity prices where exploding as well. Today we have the US stock market posting NEW all-time highs every other day, while commodity prices continue to weaken. From what I heard Goldman remains "neutral" on commodities, sighting micro-economic drivers such as rising energy supplies and metal inventories beginning to reassert themselves. Thinking we may be in a cycle of excess capacity and slow growth...essentially meaning lack of returns in commodities. In my opinion we are seeing the exact same thing happening in global agriculture. Higher prices have encouraged an increase in supply, while weak global growth may trigger a period of excess rather than a period of short supply. Certainly this is a view from 10,000 feet, but often times as producers we get ourselves too deep in the forest to see the trees. Just make certain you are seeing the entire macro view and  perspective, not just looking out your own backdoor! CLICK HERE for my full report and details on what I see moving the markets next week...   

 Corn traders will now start to aggressively question the USDA's 158 bushel yield estimate. I have to assume the USDA was thinking we would be at or around 60% planted by May 15th. With this clearly not being the case... The question is what now happens to the new-crop yield number?

Even though the May Corn has gained handsomely on the July, and the bull-spreads have paid good dividends the past several months,  I am not so certain I like the thought of staying bull-spread the old-crop. With the fund roll being something to consider moving forward you have to ask yourself if they are really going to be eager to roll into a old-crop vs. new-crop spread. As of late the funds have not been too keen on playing old vs. new crop game and with new-crop yields in question and a possible game changing type report at the end of June I am just not sure the risk-to-reward makes a lot of sense. Yes, old-crop corn supplies are tight, but as with many things in life, overstaying your welcome can often be a costly mistake. From my perspective, producers with old-crop bushels should be moving bushels on any and all rallies or additional strength in the basis. Producers should have good coverage in place and risk reduced on new-crop bushels. A rally of some sort into the June 28th USDA Grain Stocks and Acreage report might be your next selling opportunity. Keep in mind there is also a USDA Supply & Demand report out on June 12th.