Apr 24, 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.

Is Corn Planting Progress to Remain Bullish?

Apr 24, 2014

Corn demand remains strong and the trade is wanting more assurance that the US crop is going to get in the ground in a timely fashion. There is talk throughout the trade that US producers in many locations will remain sidelined, some saying for another 5-10 days if the forecasts hold true. From my perspective we have made huge progress this week and conditions across the country as a "whole" are very good. But in the markets as in life..."the squeaky wheel gets the grease." Nobody is talking much about the guys who have already gotten their entire crop planted.  I also don't hear or see much being written about the increase in corn acres. I have talked to a lot of farmers who are seeing fields that were supposedly NOT going to be planted to corn, in fact now being planted to corn.  My contention remains... the overall pace of planting (as a ratio) is only going to improve from here and the total number of corn acres is going higher not lower.  Moral of the story, from a purely fundamental perspective one would have to argue corn prices are due for a setback in the days ahead as the market comes to the conclusion that the crop is going in the ground and that more acres are being planted than originally anticipated...if it were only that easy. Unfortunately, much larger forces (Algo's, Quant's, Hedge & Index Funds, etc...) now influences the trade, trying to predict how they will rotate, maneuver, interpret and view the entire landscape is a much more difficult task.  As a producer I am going to remain 50% sold/priced in new-crop, looking to make another sale vs. the DEC14contract up near $5.25. Remain patient and "listen" to the market...   CLICK HERE for my daily report....   

Planting Progress: Since I am a "visual" type guy, I had the office put together an info graphic of the USDA's planting pace. This is as of this past Sunday but I will be updating it each of the next several weeks so we can more easily see what is taking place. As you can see there are many states in the "red" or behind the average 5-year planting pace, but if you look at the specifics of each state I am thinking we start to more rapidly close the gap. There is already talk floating around that both Iowa and Illinois have made HUGE strides this week, and I still think we could get close to 45% planted by May 4th. 

Corn Prices Show Resilience with Planting Progress...

Apr 23, 2014

Corn continues to baffle many traditional fundamental traders. Just when you think it's acting "sick" and that prices are going to break it shows signs of resilience.  Some traders are blaming it on the unwinding of spreads by the Quant's or Algo's...who have been long soybeans against a little bit of everything, including short corn and short wheat positions. As they exit theses positions they obviously have to sell the soybeans and buyback the corn and wheat to get flat. I should note there was also some talk yesterday that a couple of cargoes of Ukraine corn that was supposed to be delivered to an importer was NOT going to be shipped due to some political concerns. The trade is also talking about the fact the Argentine basis level remains strong and that both Argentine and Ukraine corn remain more expensive than US corn. There is also some conflicting weather forecasts floating around, with a couple of well followed sources calling for cooler and wetter than normal conditions across a large portion of the corn belt. I suspect as long as "demand" stays strong, which appears to be the case, the trade wants to be more  certain about timely planting and overall new-crop production. From my perspective this means new-crop DEC14 prices might simply remain trapped in a range between $4.80 and $5.10.  CLICK HERE for my daily report... 

Planting Progress Pace to go Higher with Weather Improvement...

Apr 22, 2014

Corn planting pace and total number of acres remain the current debate.  I should point out in the record yielding year of 2009 the planting pace was reported at 22% complete compared to just 6% complete this year.  But what you need to consider is that the following week the crop was reported at just 33% planted and after the first week in May just 48% planted. My guess is we end up very close to these numbers this year after the next two weeks are reported.  Outside of weather, total acreage and the pace of planting there is not a lot of NEW news or headlines to discuss this morning.  US corn imports into China remain limited as shipments of Syngenta's MIR 162 continue to be kicked. I should however note that US exports of DDGs in to China remain extremely strong. Producers should keep hedges in place as I believe the next few weeks could bring along lower prices.  I am afraid we first have to digest the bearish news of an increased planting pace and then more total corn acres going in the ground. Once we get past those two obstacles then the trade will be able to start focusing more attention on what could be bullish "weather headlines."          CLICK HERE for my daily report...

Beans Take Breather Before Push Higher?

Apr 21, 2014

Soybeans crush estimates from USDA may be too low, exports might still be too low as well unless we start seeing more Chinese cancellations (which there are more rumors floating around this morning). Bottom-line US demand remains strong and available supplies are in question. The trade continues to ask, how high is high enough to ration demand? In an effort to do it's job the market will continue to push the upper limits to see if and when end-users and importers will cry uncle and throw in the towel. Importing more soybeans from South America is the obvious solution, but I am thinking that task won't be as easy as it appears on paper. Moral of the story, this market might need to take a little breather and catch it's breath before making another final run higher as US supplies tighten, but I still think there is more room to the upside. From a spec perspective this remains a dangerous market.  Producers should have at least 50-60% of their new-crop priced and looking to find ways to secure and limit the remaining downside exposure. Continue to keep your eye on the political problems and labor issues in Argentina, things are starting to heat up a bit.  CLICK HERE for my daily report....  

Corn Bulls to Remain Patient....

Apr 17, 2014

Corn demand remains strong as weekly ethanol production shows a jump of almost 13% when compared to last year at this time.  In fact last weeks production of 939,000 barrels per day is closing in on the all-time record of 963,000 set back in the last week of 2011, when plants were trying to get the final bit of government incentives. The problem is many sources inside the trade, including myself, believe the USDA currently has planted corn acreage too low.  As long as the controversy and calculations of the "missing acres" from last year continues, I suspect the trade will feel like more acres could be added to the equation at any time. Throw in what appears to be a nice window of opportunity for increased planting and you can see why corn is struggling to keep pace. Until we get a more significant "weather" story to go along with a few of the other potential bullish cards in our hand I see no reason to raise our bets. I remain comfortable with around 50% of our estimated production priced.  I am targeting the $5.25 area vs. DEC14 for another small round of sales.  My hunch is this horse just isn't ready to run as of yet...be patient and wait for the Jun/July weather headlines.      CLICK HERE for my daily report....

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