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.
Producers who continue to hold old-crop corn bushels, and are in areas that are enjoying a good strong basis, might want to consider pulling the trigger NOW on your "cash-sales" and reducing your risk by re-owning cheap calls on the board. Get with your advisor to build a strategy that is right for your specific operation. I am just afraid as we move into Jan-Feb-Mar-Apr heavy farmer selling is going to weaken the basis and potentially drive cash-prices even lower. The more I travel around and the more producers I talk with, the more I see bushels that have NOT been sold or priced. I am telling you now this crop is bigger than the USDA is currently estimating, and I also think we have underestimated just how much "unpriced" corn farmers are still sitting on. I know lots of producers are sitting on a good chunk of cash, and believe they have the money to ride out the wave. If your one of these producers, please remember "the markets can remain irrational much longer than most can remain liquid." Lets also not forget come late-Feb the USDA is going to throw out their estimate for next years crop which could push ending stocks to 2.4 billion or maybe even higher... Without a major "weather" story, that type of ending stock number would darn near put the final nail in the coffin for corn. Prices sub-$3.50 could become a real-reality! make sure you are considering ALL of the pieces. Don't forget the December corn contracts go off the board today. Click here for all my daily comments......
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