In reality, we'll still have plenty of corn.
Jan 10, 2014
Hello Pro Farmer Members!
That was a scramble! USDA reports on a Friday at 11:00 with a noon deadline on the newsletter only means one thing -- a busted deadline to get the newsletter to the printer. The good news is we work with a great printer... so it'll be in the mail yet this afternoon.
Up to 10:59:59.99 a.m. CT this morning, the attitude in the corn market was prices needed to go lower to find demand. In reality, the market found record first-quarter demand at prices that ranged from $5.06 (September high) to $4.20 (November low) in March corn futures.
Also, in reality, there will still be more than 1.6 billion bu. of corn left over at the end of the 2013-14 marketing year. That means price rallies should still be sold in old-crop corn. I'm not sure if that's the case in new-crop corn... not yet. Carryover at the end of the 2014-15 marketing year is still likely to inch higher, but new-crop corn futures posted an upside key reversal today, which should encourage some short covering. Also, long-term trending markets (like the current downtrend in corn) love to establish a trend change with a key reversal.
Maybe the best news for new-crop corn futures is that February is right around the corner. The average of December corn futures in February is the coverage price for revenue protection policies. If we can get some additional short-covering in new-crop corn futures and then even steady trade through February as the market frets over a potential decline in corn acres, we've still got a chance of a $4.50 spring price for crop insurance.
The spring crop insurance price on soybeans is also established in February, and new-crop beans seem to be building fresh downside momentum as we get to the middle of January. The one-tick close under $11.00 in November bean futures will make funds comfortable on the short side of the market for the near-term.
By the way... take another look at the old-crop bean S&D balance sheet. Yep... there is a chance carryover won't go up from last year's 141 million bu. finish to the 2012-13 marketing year.
The wheat market can't seem to take its focus off old-crop fundamentals. The unexpected uptick in wheat carryover not only overshadowed what looks to be a significant drop in wheat acres for the 2014 harvest, it evidently completely hid it from wheat traders' view.
We're headed for Lincoln, Nebraska, this weekend! This is going to be our only western Corn Belt Profit Briefing Seminar this winter. There's still time to register for the two half-day seminar in Lincoln, but you're running out of time. Call Shelley early Monday morning (1-800-772-0023) and we'll get you in. You can get more details of the meeting here.
That's it for now...
... I hope to see you Monday in Lincoln!
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