Cold in the Midwest and corn is very weak today
Apr 15, 2009
Special note: We normally don’t like to discuss personal things in our Ag Web comments but tomorrow is the birthday of one of our most important staff members, my wife, Karen Utterback. If you have been to any of our seminars or worked with any of our brokers you know she is a critical member of our team. Happy Birthday!
Well, its happy Tax Day and it's overcast and wet here in the Indiana—which represents the attitude most of us [I believe] feel about today. The trade however is looking at the next week’s weather and is suggesting some planting is going to happen. We never said that the planters were not going to move some where, it just the bulk of the Midwest is going to be very slow in getting the crop planted evenly. Our weather service that we are featuring on our internet site continues to suggest limited activity in April and much of the planting will be done after May 15th rather than before.
Nevertheless, the corn market was very weak today. It really looks like it is in a trading range with support at $4.05 and overhead resistance at $4.40. It’s going to take confirmation one way or another about planted acres before corn breaks out of this range. We would suggest the odds now are less than 40% now that we will see the December corn break above $4.50 but holding off on further selling is still recommended if you have at least 60% of your 2009 inventory sold.
As for beans, the old crop continues to pull up the bean market. We would continue to expect the July-to-November bean spread to continue to widen. The old crop will be firm because of tight stocks and continued strong demand by China, the back end will be weak because of prospects of larger acres and bigger carryover. We continue to encourage buying of the spread at the current 90 level but with stops at 40 cents for the potential to move above $2.
Finally, wheat continues to drag lower. We see limited upside potential in wheat until we get into harvest and the bin doors shut. We are not really excited about buying wheat until we get into late August to September time period. We hope you have already forward sold a significant amount of inventory as we have suggested at our internet web site.
If you need any help in implementing a speculative or hedging strategy give us a call at 1-800-832-1488 or email me at email@example.com or firstname.lastname@example.org. Tomorrow we will talk a little about the bonds, gold and crude oil.
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