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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.

Do You Need To Re-Own Corn???

Sep 29, 2010

Many readers have contacted me during the past few weeks asking about strategies they could use to re-own corn. For some, they had been following advisors or programs that have gotten them oversold.  For others, they simply didn't produce the yields they had anticipated and are coming up short their commitments. 

As I continue to preach, getting over-sold in today's markets can be fatal. Several years back you could have gotten away with it, and even been successful at times. In the past few years, with more and more fund money and increased volatility, getting oversold can often times be catastrophic to the operation. 

Tomorrow the markets may present us with another opportunity to re-own corn. For my daily subscribers many followed our lead and bought on the morning break and now have an early profit in the position (sometimes it is better to be lucky than good).  

Early tomorrow the U.S. Department of Agriculture will release their quarterly corn stocks estimate, on average analyst project the stocks to come in around 1.407 billion bushels.  I am hearing it could range anywhere from 1.350 billion on the low side to 1.489 billion on the high side.

Those numbers are all down from the stock level of 1.673 billion a year ago.

As I have been mentioning we may see a much greater number than most have anticipated because early harvest in areas of the South may get counted in with the old crop supplies. I am sure this has happened in some areas and will certainly cause higher ending stock numbers. 

Here is the kicker, I think the funds have obviously realized this same thing and have exited or squared positions anticipating a bearish report and higher numbers. They have broke the market over 5% in the past few days and had it down early again today.
 
Smart money has realized if this reports comes in neutral to slightly bullish we will be off to the races once again. If the report comes in bearish we will more than likely open lower, but trade higher on the day as the funds step back in.  It will take a seriously higher ending stocks number to keep us down long. It wouldn't surprise on a bearish report to see us down 15-20 early in the session only to close significantly higher. 
 
If the report is neutral to bullish we will easily be 10-15 higher. 
 
You should anticipate similar action ahead of next weeks USDA report also.
 
***We continue to advise re-owning the breaks. Aggressive traders may want to consider buying this market today and holding it through the report.  Expect profit taking on a rally to stall this market out early next week as funds prepare fro the next USDA report.
 
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The comments and information above belong to Kevin Van Trump, Ag Hedge, and their team of professional trade analyst. The information is believed to be reliable but no guarantee either written or implied is being made. Hedging and or Investing in derivatives, futures or options may not be suited for all producers or investors. This information is solely a recap of theories and strategies being used by Ag Hedge and or it's team of trade analyst. Any investment or hedge decisions that you make are solely your responsibility. Please consult with your licensed advisor and read the entire "Risk Disclosure" statement before you consider using any of the above mentioned strategies or trading techniques.
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