With such a small carryover on corn, growers should expect wild weather markets in both directions this summer. Traders will be buying and selling on the 10 day or longer forecast, but it can’t possibly be accurate that far out, says Gregg Hunt, senior broker with Archer Financial Services. He spoke at June’s Top Producer Summer Seminar.
“Weather will cause huge run-ups or run-downs,” he says. “The grain market will come up and down like never before.” Hunt was part of a panel discussion on the grain market.
One factor producers need to be aware of is that there are a lot of standing orders for corn at $7/bushel. For an average yield of 162 bushels per acre, the crop is going to need cool nights in the Midwest. Mark Gold, managing partner of Top Third Ag Marketing, says that “if summer is hot and dry, prices will blow the socks off people.” With current prices so strong, Gold says it’s important not only to look at pricing the 2011 crop, but producers should be looking at 2012 and even 2013 as well.
On demand, Bill Biedermann, Allendale Inc., remains bullish. One reason why is China. “They have to build stocks,” he says. Other nations, such as Morocco, are buy, too, he notes.