The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
What is the old adage "Rain Makes Grain" and looking out the back door with today’s rain, the crop looks good. Corn in many fields is beginning to tassel, above shoulder high and looking to be a great crop. Many in the trade are guessing yields this fall could come in above 162 to 167 bushels per acre giving the United States a carryover above 2 billion. Demand is already becoming weak and the potential for a good global corn crop implies the corn prices have no reason to bounce. The only reason would be dry weather in August, the potential for an early frost or a reduction in acres planted in Iowa or Minnesota.
Many producers are already facing a good crop and the new crop cash price below the $4 level hoping for a bounce into harvest or after the bins doors shut. The only problem I have with that scenario is what if everyone has a decent crop and demand continues to stay weak through the end of the year and throughout 2015.
Now is a time to reflect and decide where your bottom line is as to what price is break even for corn and how to enhance revenue if the cash price does not cover the input costs. The next few years without an event to spark the prices higher, is going to be difficult at best when it comes to pricing your crop. At this time, those of you who have long puts in place could roll down and take some of the profits in corn and wait for buying strategies on the lows to start the 2015 marketing season.
If anyone feels they need to put structure into their risk management decision-making and would like to discuss marketing strategies, call Bob or Laura (1-800-832-1488). We will also try to answer questions in upcoming blogs and we welcome emails to firstname.lastname@example.org or email@example.com.
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