The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Corn bulls continue to talk about tight old-crop supplies, while the bears are pointing to what could be much better new-crop yields than the trade has been anticipating. Several sources on the ground in Iowa, Illinois and Indiana believe the "crop conditions" are improving. Which we will get clarification on this afternoon in the weekly USDA condition report. In my opinion the best way to summarize "conditions" is that better than expected conditions in the Eastern corn belt are trumping the poorer conditions in the Western corn belt.
Lets just keep in mind, we still have a long way to go until the crop is in the bin. My new-crop price target of $4.20 to $4.50 still remains intact (especially as thoughts of a 2.0 billion plus carry remain alive), but the burden of proof will soon clearly fall upon the bears. The question is will there be enough negative headlines, press and data to feed a market that is increasingly growing in bearish population??? Keep in mind China is becoming a more aggressive buyer on the breaks, and the old-crop story may still have some legs left. Especially if we see the USDA reduce ending stocks to a sub-700 million numberon Thursday like some in the trade are predicting. Producers should continue to keep hedges in place, while looking for any type of rally back towards the mid-$5.00 range as an opportunity to make catchup sales or further reduce new-crop risk. Spec's should continue to play the game of selling the rallies and banking short-term profits on the breaks.
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