Sep 16, 2014
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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Will Corn Prices Continue to Trade Sideways?

Jul 22, 2014

Corn market seems bound and determined to print a $3.50 price tag, while I'm continuing to hear many bearish technicians inside the trade continuing to call for an additional drop in price to between $3.05 and $3.15 by harvest. Not only are we looking at the potential for a NEW record corn crop, but many inside the trade are starting to questions the growth of overall corn demand. Demand for ethanol appears to be strong, but remember estimates for corn being used as a feed grain was reduced substantially in the last USDA report, and US exports continue to be questioned. From where I sit, as long as China continues to band US MIR-162 corn varieties and US based DDGs its going to be tough to change the mindset of the trade.  Also keep in mind EU corn imports are being reduced as well on increased importing tariffs.  Moral of the story, the balance sheets simply don't appear to be getting any tighter...at least not any time soon. Obviously the remainder of the US growing season will ultimately determine how the supply side story ends.  The trade seems to currently be using a 168 to 172 type yield estimate. My guess is it will take a big surprise to the downside to stop the bleeding and provide the balance sheet guru's with a slightly less bearish mentality.  Keep in mind the funds are still long the corn market, therefor more long liquidation could continue pressuring the trade to the downside. Producers MUST keep hedges in place and continue to stay under protective shelter until the bearish storm shows more clear signs of dying down. CLICK HERE for my daily report...     

Thinking About Getting Long The Corn Market? From a spec perspective corn well-below the cost of production certainly looks enticing, especially if you're? a longer-term investor.  You have to imagine the upside reward during the next 3 to 5-years could be somewhere between $2.00 to perhaps even $3.00 per bushel, just depending on the various circumstances. You also have to believe the upside looks to have more potential than the downside risk (which might another $1.00 per bushel). My only reminder to those looking to be longer-term bulls in the corn market is that it might take some time. Don't forget US corn prices have been below the cost-of-production way more often than they have been above!   CLICK HERE for my daily report....

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