Jul 29, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin

CornCollegeBanner home


July 2011 Archive for 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.

What Dynamics Are Most Affecting Grain Prices Currently?

Jul 29, 2011

 The trade obviously continues to focus on the weather.  I am personally of the opinion that with additional rains being forecast for the northern half of the corn belt during the next few days, and the southern areas remaining blistering hot and dry, the trade is thoroughly confused. The recent heavy rains being reported in some areas is now a concern, but most traders are uncertain if they should buy into the potential yield problems being associated with the record high temps during the critical pollination stage with prices already at these extreme levels, or should they be selling at these extreme levels on hopes that the advancements in seed technology will help the plants pull through the extreme drought like conditions and produce above trend-line yields. 

I am certainly a believer in technology, but I am also a "realist." With this being said, I see absolutely no way that we produce a crop above 156 bushels per acres. A reduction to 156 leaves ending stocks extremely tight.  Throw on top of that the fact that we might eventually see even more crop abandonment being reported, and a reduction in both planted and harvested acres and I believe we remain extremely tight.

There is no debating the fact that the trade is currently confused by so many dynamics at play right now.  Below are a few of the more interesting balls that are currently in the air.
 
The Current Wheat Dynamics
What type of quality issues a now popping up in the European wheat market? From what I am hearing there is starting to be more thoughts and concerns about the quality of the European wheat.  If you remember, a few weeks back the world was worried about European quantity, now everyone seems to be worrying about the quality of the crop.  Early on dry conditions, followed by heavy rains late, now has the trade concerned. Unfortunately no one really knows the extent of the issue.
Spring Wheat tour taking place right now in the US is uncovering much lower yields than the USDA had estimated. The trade is concerned about the eventual outcome, that should be reported today.  Some discounting totals because they feel it is too early. My guess is they find better yields and the numbers start to look more like the USDA's.  I would like to believe the numbers could push down closer to 40 bushels per acre, but I am thinking they jump up closer to 42 or 43 before it is all said and done.  Still below last years mark of 46.5, but not as low as many had been thinking. 
Black Sea or Russian wheat finally starting to....
 
The Current Corn Dynamics 
The big question right now is obviously yields, and in particular how much, if any, has the overall US corn yield been affected by the extreme night time temps and extreme heat during the critical pollination and ear development stage. As I have been mentioning the past few sessions, I think we will be in the mid to low 150's.  My guess right now is that we come in around 155.  I could see myself dropping this number closer to 152 or 153 once I know more about the heat and the actual damage that has been done. It is still extremely early, so these numbers could certainly change, but for now this is my best guess.  
How far will the corn tip back? Will "blanks" that are being reported affect overall yields and by how much? Still too early for me to guess, some are.... 
 
The Current Soybean Dynamics 
How will overall soybean yields be affected by the recent hot temperatures? You have to believe there has already been some type of slight reduction in the top-end of the soybean yields. I am not saying anything major as of yet, but a move down into the 43 range is not out of the question. The next few weeks will be critical.
What will happen with overall soybean acres? In the USDA "re-survey" will they find more acres or fewer soybean acres planted? I am thinking we might see the USDA lower the number of corn acres planted, and actually raise the number of soybean acres planted.  This could certainly change the outlook for ending stocks, and is something we must certainly prepare for.
How will Chinese demand affect overall US prices? With fewer soybean acres....
 
 
For the rest of my thoughts on wheat, corn and soybean dynamics, go ahead and subscribe to the FREE Full Report by clicking the link below.  I also give my full run down on soybean yields along with my thoughts on making cash sales as we head into this Supply and Demand Report and harvest time.  Remember, the markets don't react to fundamental news like they use to, in the FULL report, I bring you the inside scoop on what the Big Money players (Hedge Funds/Managed Money) are doing and how to take advantage of it!  Simply follow the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets. 
 
 

 Send My Free Report

 

       

Follow FarmDirection on Twitter

 
 
 

Are the Odds In Favor of a "Bullish" Corn Report?

Jul 26, 2011

 

Morning Summary:  As I mentioned yesterday, I firmly believe you have to take advantage of the next 2-3 weeks if we see some additional "weather" related price rallies. The problem is I don't want to carry a large portion of our production forward simply on "hopes" of seeing additional yield reductions somewhere down the line. All you have to do is look at what happened in the wheat market as of late, to help you not make that mistake. The wheat market was running wild a couple of months back with thoughts of lower yields coming at harvest time. Once the producers got into the fields and found the yields hadn't suffered as much as many had anticipated, the trade quickly setback.  Yes, there was also the major implications of Russia coming back online that has weighed heavily on the market as well, but I just wanted to point out that the time to take advantage of "yield" premium is when speculation is at its height, not when the yield is actually being accounted for.  

With this being said, one would have to imagine the "yield speculation meter" (if there were one) during the next three weeks would be at its peak. Especially now that the USDA took another 4% off of the "good-to-excellent" rating in last nights corn crop condition report. The biggest one week downgrade in 3 years. 

 

With thoughts that the overall condition is getting worse, I am hearing corn yield speculation ranging from the upper to mid 150s, all the way down to the more extreme 130s. These extreme type views are coming on the belief that late "silking" will push pollination even further into the heat that is now being forecast for the next couple of weeks.  Not to mention that last nights USDA numbered showed corn "silking" last week jumped from 35% to 65% in just one week. That means a large portion of the US corn crop was pollinating right in the middle of that extreme heat wave...Not Good! 

 

As you can imagine the rumors should start running wild in regards to how far yields could potentially drop.  My fear is that once producers get into the fields and start reporting better yields than have been forecast, some of the bulls will start to bail out, and the extremely low side of the yield estimates will quickly be discounted and taken off the table.  

 

Same thing goes for soybeans, just simply push the timetable back a couple of weeks.  Yield speculation, or should I say yield reduction talk should start to peak during early to mid-August. As time passes and the high estimates and low estimates are gradually discounted, the price premiums will also adjust accordingly. Bottom-line, I like using these volatile pricing periods to make cash sales.  

 

I had some questions yesterday from some readers about my thoughts regarding the USDA corn yield estimate coming up in this next report. Many are thinking that since the USDA traditionally counts "stalks" rather than "kernels" their yield estimates will be much lower in the coming reports rather than in the upcoming August report.  I am not saying that couldn't be the case, but I am not yet in that camp. I prefer to work off of what I have seen the USDA do in the past. Many are speculating that with the extreme heat and dry conditions at pollination, it will force the corn to start ticking back on the cob, essentially not filling all of the kernels. Thoughts are since the USDA looks at stalks and not kernels this time of year they will not be taking this into account. My thoughts are somewhat different.....

 

 

For the rest of what I believe the USDA will take into account in determining yields go ahead and get signed up for my report.  It's FREE!  I also give my full run down on soybean yields along with my thoughts on making cash sales as we head into this Supply and Demand Report and harvest time.  Remember, the markets don't react to fundamental news like they use to, in the FULL report, I bring you the inside scoop on what the Big Money players (Hedge Funds/Managed Money) are doing and how to take advantage of it!  Simply follow the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.  

 

 

 

 

 

 

 

 

 

       

Follow FarmDirection on Twitter

 
 

 

Listening to What the Market is Telling You

Jul 22, 2011

 I continue to worry about how the inexpensive "Black Sea" feed wheat is going to affect US corn sales.  You have to believe with Russian feed wheat trading at $75 to $90 less than US corn, exports sales of both US wheat and corn could certainly struggle.  With Russia right in the middle of harvest, this inexpensive alternative could simply continue to weigh on global prices.  I am just not sure corn has the power or the backing right now to take "both" of these markets to higher ground.  On it's own accord, I believe "Corn" would be performing very well, but with wheat continuing to trade at a steep discount, we just cant seem to gain the traction I would have anticipated.  

 

I am starting to think it might take several weeks or even a couple of months before we are able to work through the glut of feed wheat Russia has thrown on the market.  I haven't even touched on the fact that we now have reports of ranchers in severals parts of the US starting to work in High Protein "Hard Red Wheat" into feed rations...  This is something we certainly need to keep our eye on as we move forward. 

Bottom line, we need some type of support in the wheat market before we can run corn prices much higher.  I am thinking wheat has support down in the $6.25 to $6.00 range for sure, but a break of that magnitude could pull corn down to around $6.50.  

Yesterday's market action was somewhat of a concern to me and has therefore prompted me to ease my bullish corn rating back just a touch.  As you know, I prefer to listen to the "markets" rather than the other analysts, and from where I sit, the markets are struggling to digest extremely bullish news.  We had very strong "outside" market action yesterday, right along with one of the hottest periods ever recorded for corn pollination, and the market struggled to find direction.  This isn't what we want to see.  I have to admit that makes me a little more apprehensive, and I am starting to think this run might take some time to play out.  With that being said, I am going to trade extremely small, still only from the bullish side, and continue to be selectively only buying on the deep breaks.  I would urge you to follow a similar logic.    

I definitely want to be long, as I seriously doubt the yields or harvested acres are going to be there when the smoke clears and dust settles.  I am simply not good enough to try and play the short-term swings, therefore I continue to believe you have to stay bullish in small doses.  

With absolutely no clear vision as to what cards the USDA will deal out of the deck in the August report, I urge everyone who is long to make sure you are in a position where you can weather the storm.  We might not see any real meaningful numbers or the extent of the damages until the September 12th report...holding on until then could get painful if you are over leveraged. 
 

Folks, to truly understand what moves these markets, you must first understand what Managed Money and the Funds look for and then position yourselves accordingly.  That understanding is what I have spent the last 6 or 7 years pursuing and have built my Daily Report around.  If you haven't yet seen my Full-report, you need to go ahead and get signed-up.  It's FREE!  Along with Cash Sales and Marketing strategies, I will continue to bring you the inside scoop on what Big Money is doing and how to take advantage of it!  Simply follow the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.  

 

 

 

 

 Send My Free Report

 

       

Follow FarmDirection on Twitter

 

My Thoughts on Yields

Jul 21, 2011

 I took a lot of grief early on from several analyst who thought my 155 corn yield number was way too low, now I am hearing talk and numbers being throw around much closer to 152 or maybe even 151.  I hate to even throw this on the table, because I don't want you getting "wildly" bullish this early, but I am hearing some very well respected sources starting to throw out sub 150 corn yield numbers.  

Personally I am content right now at keeping my number closer to 155, as I suspect the USDA will not make any extreme type adjustments in their next report.  It is simply still  too early in my opinion to make extreme type cuts, and my best guess is that you will not see the USDA cut any further than 156 or 157 this next go around. 

In any regards, the "yields" are certainly starting to be reduced just as I had anticipated, and seem to be the latest topic of discussion.  With the yields being challenged, the ending stock numbers are starting to be recalculated as well.  Many are now starting to bust out the eraser and pencil in numbers closer to 600 million bushels for corn.  I have even heard of a few scenarios being painted that would put us well below 600 million by the time it is all said and done.  

The bottom line is this, if weather stays this hot for two more weeks and rainfall is limited, we are looking at yields in the 140's.  If this happens, new crop corn will be at $8.00 in a hurry, and beans could be at $15 or even $16 on additional fears.  If the "outside" markets can manage to keep the wheels on the wagon we might even be able to add more premium than that.  

Don't forget we haven't even started to talk about the potential for an early frost.  There are many talking in the Dakota's that the crops might never make it out of the fields. From what I am being told, many believe they are so far behind, that major frost is almost a guarantee, and it will certainly affect the overall yields.  

Throw in the fact that several weather forecasters are predicting strong tropical storms late in the summer, and we could see even greater frost-like conditions than we are currently anticipating.  

The "Bull's" are out of the gates and definitely running....  Make sure you on board or you stand a strong chance of getting trampled!  It is my belief that many of the funds are still on the sideline "licking their wounds" from the last time they tried to make money buying corn above $7.00.  Once they are able to confirm this is not another round of smoke and mirrors, I would be inclined to think they jump back on board.  We will definitely need their wind behind our sails if we have any hope of reaching $8 or even higher.  

The "outsides" have been showing some signs of resilience on the heels of President Obama making an announcement that we are one step closer to solving the US debt ceiling debate.  There has also been some very strong US 2nd quarter earnings being reported as of late, with both IBM and Apple blowing earnings estimates out of the water.  Most traders still have one eye though on the European debt situation and the question remains, can "all the King's horses and all the King's men...put Euro back together again?"  We should know more after this week's European Summit.

I still like making cash sales at these levels and re-owning the board, with a more limited risk type play.  The basis is good and this strategy gives you a way to reduce ultimate exposure in these volatile weather markets.  Make sure you are considering all of your options and discussing every possibility with your advisor.  My thoughts are that any time you can reduce overall risk while keeping your upside potential, it's a win-win!

Folks, to truly understand what moves these markets, you must first understand what Managed Money and the Funds look for and then position yourselves accordingly.  That understanding is what I have spent the last 6 or 7 years pursuing and have built my Daily Report around.  If you haven't yet seen my Full-report, you need to go ahead and get signed-up.  It's FREE!  Along with Cash Sales and Marketing strategies, I will continue to bring you the inside scoop on what Big Money is doing and how to take advantage of it!  Simply follow the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.  

 

 

 Send My Free Report

 

       

Follow FarmDirection on Twitter

 

Thoughts From A Seasoned Grain Guru

Jul 14, 2011

 

 

I received a fantastic e-mail from one on my long time buddies.  For years he was regarded by many as one of the largest grain spec's in the game.  I value his opinions and insight,  and always perk up when I hear him throw his hat in the ring and his two cents about the markets.  I have tried to summarize his most recent thoughts about the current corn and wheat situation below. I hope this gives you some additional insight as to what a few of the big boys are thinking at this juncture.  

 

 

  1. First of all he believes the % of harvested corn acres could be 2mm acres to high.... simply assuming 1mm acres of that didn't even get planted at all...net/net he is looking at a reduction of around 3mm acres = 460mm corn.

  2. Next, he believes China import numbers being estimated at just 2mmt for 11/12 is a joke, 100mm bushels plus to small and will need to be adjusted.

  3. Next, he believes the heat could pull the national yield down to 155 (not 160 or higher like some are still predicting).  A much more realistic 155 yield compared to a 158.6 as the USDA is projecting would basically reduce production by 320mmbu. 

     

Therefore your ending balance would be affected as follows: 

Currently the USDA is forecasting the 11/12 ending stocks +870 million

 

  • subtract 460 due to floods and unplanted acres (point #1 above).

  •  subtract another 100 for understatement of Chinese imports (point #2 above).

  •  subtract another 320 for the yield adjustment down to 155 (point #3 above).

 

All total this gives you additional reductions of 880 million bushels, or an ending stock number in the "red."  We all know this is not possible, and will not be allowed. Therefore somewhere along the line demand must be cut or we must feed something else.  

He further points out that we are now experiencing our longest run ever for Chicago wheat trading at a discount to corn, and questions if we may be entering a new paradigm, and a complete shift in values.  He is not the only one kicking this idea around as I am now hearing more talk that Chicago wheat could continue to trade at a discount to corn through the remainder of the year. 

 In our conversation he also points out that Chicago wheat spreads have come in partly because of Central States stopping July wheat to move to empty storage facilities tucked between ethanol plants to hopefully earn storage income...  Pointing out that if the VSR goes any wider, they will more than likely start moving Chicago wheat to Anchorage Alaska to store, hence we have gone far enough, particularly if the corn crop is short and storage is abundant.  His thoughts are we might even bring it in a click or two, who knows...

In summary, he believes if the cards fall on the table just right, corn has the potential to be a complete run away train, and if it does it might just have enough steam in the engine to pull wheat right along with it.  He is bullish the Dec 11 Corn against the July 12 Corn, but he is not yet bullish the Chicago wheat spreads...


Folks, to truly understand what moves these markets, you must first understand what Managed Money and the Funds look for and then position yourselves accordingly.  That understanding is what I have spent the last 6 or 7 years pursuing and have built my Daily Report around.  If you haven't yet seen my Full-report, you need to go ahead and get signed-up.  It's FREE!  Along with Cash Sales and Marketing strategies, I will continue to bring you the inside scoop on what Big Money is doing and how to take advantage of it!  Simply follow the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.  

 

 

 Send My Free Report

 

       

Follow FarmDirection on Twitter

 

 

 

 

 

 

 

What's In Store for Tomorrow's USDA Report

Jul 11, 2011

 I believe there is still one piece of bearish data looming that has a few bulls still on the sideline, and that is the USDA report scheduled for release tomorrow morning before the open.  With the last USDA report delivering a Mike Tyson like uppercut to those who were long, very few "bullish" traders are willing yet to step back into the ring, fearing a possible repeat performance could be in the cards.  Once the report is behind us, I would suspect those counting cards will see the deck being stacked with more  "bullish" possibilities rather than "bearish."  After the latest round of USDA data is digested the trade will immediately start to focus on weather, yields, and the results of a "re-survey." I like buying the breaks, and believe we might get an opportunity over the next couple of days to see another push lower.  Remember, a serious "weather" play will happen in the blink of an eye.  It will not continually give you opportunities like a "demand" type play.  If you are wanting to make the play, I urge you to be extremely cautious.  Look to use "calls" or other types of bullish strategies that provide you with "limited-risk" or downside exposure in case the weather card never hits the table.  Look for the weight of the "outside" markets to continue to add pressure through the first half of this week.

Tomorrow's USDA Numbers 
I wanted to give you quick guide to what most in the trade will be looking for in tomorrow's report that is scheduled for release at 7:30am CST. Hope this helps give you a better idea. 
  • I am hearing several analyst suggest that corn ending stocks for both 2011 and 2012 will be raised substantially.  Remember, the USDA was at 730 million bushels for 2011 in their last report, and 695 million bushels for 2012.  There are guys talking that the numbers could now be closer to 1 billion bushels...  I am hearing a few trusted sources throwing out more realistic numbers in the low to mid 800 million bushel range for 2011, and lower to upper 900's for 2012. It will certainly be interesting to see how much more corn is now being estimated than just a few weeks back. Most are thinking they will add 175 million bushels to 2011, and up to 300 million bushels in 2012.
  •  
    Most are under the belief that the USDA is going to raise their 2011 soybean ending stocks from their recent 180 million bushel estimate. I have heard numbers anywhere from 190 million upwards to 220 million.  My best guess is we see something right around 200 million bushels, on thoughts that several cargoes of Chinese purchases will be rolled forward or possibly even canceled.  On the flip side you have to believe the USDA could actually reduce their 2012 number on thoughts of fewer acreage and increased exports. In their most recent report they had the 2012 ending stocks estimated at 190 million bushels.  I am hearing talks ranging substantially lower for 2012, and a number closer to 160 million bushels would not surprise me. 
  •  
    Another interesting number out tomorrow will be US spring wheat production estimates. Remember, last years crop was estimated at 616 million bushels, this time around most are thinking we will see a number between 540 and 550 million bushels.  
  •  
    Look for the USDA to raise their 2011 wheat ending stocks number from 687 million bushels up closer to 700 million bushels despite the reduction in Spring wheat.

Some of the Big Boys Think the Commodity Run May Be Over

Jul 06, 2011

 

Hedge fund managers have been taking it on the chin as of late to say the least.  Several are now reporting that they are going to be pulling more money out of commodities at least for the short-term, choosing to let things play out before diving back in.  A few of the other big boys like Walter "Bucky" Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama are singing a different tune.  They in fact believe commodities will rebound from the massive sell off because shortages of supplies in everything from copper, to crude oil to corn will still be in huge demand even if the economies begin to really cool.  One thing backing up their belief is that the benchmark Standard & Poor’s GSCI index is heading for a second monthly drop, led by declines in silver, coffee and nickel.  The last time that happened, the gauge jumped by more than 35% within the next six months.  The play is simply fundamental in nature, and traders are banking that supplies are simply not sufficient enough to keep pace with demand.  I have highlighted below a few of the key predictions that some of the big boys are still banking on as we move forward into the second half of the year.  

 

  • Silver could once again take back off with some thinking it could be the biggest winner, rallying possibly back to the new all-time highs of almost $50 an ounce set back in April.  While gold and copper gains could be much less significant, they are still projecting higher prices than the current levels. 
  • They are thinking Corn and wheat will be the best agricultural performers, sighting both could rise quickly by more than 30% each in the coming months.  Coffee and Cotton could also be a good bet.
  • A few of their main concerns will be Japan and if they will be able to pull themselves out of their third recession in the last ten years.  If the Australian economy will be able to overcome one of their deepest setbacks in some 20 years.  If the US fed will be forced to continue cutting intervention and debt.  If China's inflation will eventually weigh on demand and to what extent. 
  • Some of the most accurate forecasters remain bullish on raw materials.  Goldman Sachs Group Inc., which correctly predicted the slump in May, expects higher prices in six months for 17 of the 21 commodities it covers, a report June 14 showed.

 

From my perspective the bull run in commodities has come to a critical fork in the road.  I told you this would be the case a couple of months ago when Bernanke and company announced that inflation was simply "transitory" and commodity prices would soon start to set-back.  This perception has echoed in the minds of many of the world's top money mangers.  Now, as you can see we have a truly divided camp.  On one side, we have those that believe the global economic slowdown is for real and demand for raw materials and goods across the board will be retreating.  In the other corner are those that believe a global economic slow down is simply a short term speed bump on the road to massively higher demand and supply side shortages.  For me, I believe in the later.  Certainly short-term money-flow will directly influence prices and may lead to a substantial break, but longer-term there is no denying that the world is rapidly changing and supplies may remain in question for many more years.  With this in mind any supply side production issues or logistical concerns could cause massive price explosions.

 

 

Folks, to truly understand what moves these markets, you must first understand what Managed Money and the Funds look for and then position yourselves accordingly.  That understanding is what I have spent the last 6 or 7 years pursuing and have built my Daily Report around.  If you haven't yet seen my Full-report, you need to go ahead and get signed-up.  It's FREE!  Along with Cash Sales and Marketing strategies, I will continue to bring you the inside scoop on what Big Money is doing and how to take advantage of it!  Simply follow the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.  

 

 

 Send My Free Report

 

       

Follow FarmDirection on Twitter

 

"What's Important Now!"

Jul 01, 2011

 WIN! During my football days it hung in the locker room and stood for "What's Important Now!"  I can hear the coaches yelling as if it were yesterday.  Essential it was used to let us know that no matter what we had thought to be right, or what we had seen in the past, anything was possible, it was all about "What's Important Now!"  Nothing could be more clear than this in today's Grain markets.  We could certainly sit and debate the USDA numbers, and try to figure out how the boys at the NASS, in just 15 trading days have been able to find 1.6 million more acres of corn than the boys over at WASDE, but the bottom line is the "Running Of The Bulls" in corn has ended, at least for as far as the eye can see. As you have well noticed, I had reduced my "bullish" sentiment rating down to a "2" several weeks ago, then reduced it again to it's lowest level "1" a few days back. I am now going to "neutral" for the first time since the Spring of 2010.  The only reason I am not moving to "bearish" is because of the longer-term play that we still have to actually produce the crop still remains.  Not to mention the fact that old crop supplies could come up extremely short closer to harvest.  The problem I see is that with improved weather conditions being forecasted in the weeks ahead, the market will continue to focus on more "bearish" news. If you want to make the "WIN" acronym even more fitting for our current grain markets try using "WEATHER's Important Now!". Even though there may be some validity to the fact that the USDA didn't account for all of the acres moved in to "preventive plant", no one is going to know until September or August (now that they are going to re-survey).  Between now and then it's all about the "weather", with that being anyones guess, it honestly wouldn't surprise me one bit to see Dec corn pull all the way back to $5.50, or maybe even lower.  In fact, it wouldn't surprise me to see Dec corn trade in a range somewhere between $5.00 and $6.00 until we get further down the road and see some different data.  Unfortunately I am afraid this is going to leave us in a precarious situation.  Not only will we have much cheaper corn, but I am afraid in the end we might just end up with NO corn.  You have to believe with old crop supplies getting much cheaper domestic and global end-users might just run supplies dry.  Bottom-line, if we don't grow a crop, we will be back off to the races, and explosive prices will be in order.  If the crop comes in as big as anticipated, we will continue to drift lower, at least until the next major production type obstacle is thrown in our path.  Looking forward into our proverbial "crystal ball," I have to believe wheat quickly gains on corn. You also have to believe wheat will then no longer be considered a viable alternative to corn.  I also have to believe with fewer bean acres being thrown in the equation, soybeans will now start to aggressively gain on corn.  This pattern could eventually turn back around if corn production starts to be questioned, or Chinese soybean demand pulls back.  For now though you have to believe there is no alternative but for soybeans to start gaining on corn.  I also have to believe we will soon see the Dec corn trading at a carry to the Sept contracts.  For those of you who followed our advise and didn't roll "ALL" of your sales forward to the Dec contract, I think you are going to be pleased with the results here in a couple of weeks, or should I say once Dec starts trading at a carry to Sept.  Looking back now, I wish we would have never rolled any into Dec, but we simply couldn't take that risk at the time considering the market sentiment.  The way I see it, the "Bull's" are going to need some time to heal after this one!  I was extremely excited and pleased with our cash positions and hedges heading into this report.  We have some fantastic cash sales on the books, and some terrific hedges in place!  I hope we have been able to give you some good insight and help with your marketing in these volatile waters. 

 

If you guys are a little stunned at what has happened in the markets this week and would like some tips on what you can do to be better positioned and protected from another break in the markets, sign up for my Free report.  I think I have done very well in cash sale recommendations and hedging strategies for the producers that read the report and heed my advice.  
 
 

If you are not getting my free report make sure you get signed up by simply following the link below.  You can also click the button below to follow my Team and I on Twitter and get daily updates on what is happening in the grain and livestock markets.  

 

 Send My Free Report

 

       

Follow FarmDirection on Twitter

 
 

Log In or Sign Up to comment

COMMENTS

Hot Links & Cool Tools

    •  
    •  
    •  
    •  
    •  
    •  

facebook twitter youtube View More>>
 
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions