Weather May Determine Prices!
Jul 20, 2009
It was great sleep weather this weekend with the windows open. We saw some mid-70’s for daytime highs. Great for humans but not for the corn. I really thought we may have been up a little stronger today on concern about the corn crop getting behind on growing degree days. The market bounced early but could not hold and closed slightly off. September corn at $3.18 is getting very close to our $3.02 to $3.10 downside lead month targets. It’s getting really difficult to suggest new sales but a lot of calls are coming in from producers who have to make off the combine cash sales and are not done on selling.
I have to suggest if see a bounce in the December back to $3.40 or better you need to be selling. While I do anticipate a bounce from mid-August into early September by the market, it’s really difficult to say how much. With the weekly crop conditions staying strong it’s going to be difficult getting December corn above $3.50 unless there is actual crop yield loss due to cold weather. Since it’s still more than 60 days away one has to side with the market continuing to fall under the weight of a good potential crop and big supplies of inventory still in farmers hands.
At this time I continue to argue for a near term low 5 days before after the August USDA Supply and Demand report. A brief rally into September will be heavily influenced by the level of frost injury. If we are able to avoid a frost and have a normal one around mid-October I fear that we are setting the stage for a harvest flush in basis and flat price.
Bottom line: Sell any bounce above $3.40 for corn that must be sold off the combine and the look to reown on paper if we can get December corn below $3.
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