Before the markets opened, the monthly supply/demand report was viewed as neutral to corn at 675 and neutral to soybeans at 140, while wheat was considered overall bearish. The market, however, took an overall bearish tone from the starting bell as general long liquidation continued to overtake the market. The oil market corrected today, even with the overall uncertainty continues in the Mideast. The stock market even sold off hard as the uncertainty continues about the strength of the domestic and global economies. In the end it seems the bulls are a little unsettled right now and deciding to take a break from the markets until things look a little clearer.
Looking forward we have to say the basic fundamentals of tight stocks for corn still exist. We still need more than 92 million acres with good yields to have any solid chance of getting carryover back above 1 billion. We expect the market will quickly find a support base and then bounce but find it difficult to rally until we get past the March acreage report. Our bias: anything below 92 million planted acres will be considered bullish for corn, while anything above 78.5 will be negative for soybeans.
Wet weather in the Midwest is taking away the prospect of an early start to spring plantings. While it’s frustrating to some of the big producers, it’s not a factor yet. However we suggest if the weather continues to be cool and wet into April, the stage will be set for weather premiums to be put back into the corn and soybean complexes.
Overall, we believe the market is providing feed buyers, as well as those who want to rebuy inventory, an excellent chance to get positions in place in the next few trading sessions. We like selling May puts and buying July calls to provide spring and early summer protection. If you have a question, give us a call at 1-800-832-1488 or 1-877-898-4324.
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