This week the market continued its downtrend after the USDA increased corn yield to 171.7 bushels per acre and left the door open for yield to increase in the October Supply/Demand report. Many analysts will be looking for a 174 yield but we are of the opinion that the low will not be in until the actual production figures come out in January. We are setting ourselves up for a continued bear trend with a sideways to range bound corn market until spring. Carry will increase, basis will stay wide and bear spreads or time value positions will be the strategies of choice.
Looking at the December continuous corn chart above, support at the 2010 $3.4325 low was broken this week implying the $3.02 low is now strong support. Without some weather event globally or frost scare there is the potential to go to this level.
Producers, who still have unsold bushels, look to sell on any rally and buy calls on fall lows to enhance revenue. Now is when you should be making any marketing decisions prior to harvest. If you have any questions, call our office.
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 email@example.com or firstname.lastname@example.org.
SOURCE: CME Past performance is not necessarily indicative of future results. Although very reasonable attempt has been made to ensure the accuracy of the information provided, Utterback Marketing Services Inc. assumes no responsibility for any errors or omissions.
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