The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Corn bulls are wondering just how high prices can climb on the heels of the soybean market. The bears are screaming that even though individual farmers are not talking about record yields, the US as a whole is still on track to break all previous production records for corn. If you remember it was back in 2009 that US farmers produced a record US crop of 13.151 billion bushels and prices in Sept of 2009 plummeted to $2.96^6 per bushel. I am certainly not calling for a repeat performance, but I do believe it is important to review and understand our history. Below are a few highlights and comparisons I think we need to consider:
The question is will the US corn crop get larger like it did in 2009? Will we collectively set a NEW record for production? Or will the yield setback even further while at the same time seeing major cuts in harvested acreage? We could obviously go either direction right now, but with a billion fewer bushels to rely on the trade is clearly more nervous. Producers should be looking to reduce just a little more new-crop risk on the rallies to insure profitability, but don't let the perma-bears talk you into selling out just yet. I am going to pull the trigger on another 5% fairly quickly, in an effort to get 70% priced/hedged. Remember, for most of us (with storage) we have at least another 12-months to market our remaining 30%. I am fairly confident we can be somewhat patient and selective with our efforts.
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