Corn Price Risk Is As High As 60 Cents

August 1, 2016 12:00 PM

With a massive corn crop likely and USDA poised to announce new yield expectations this month, it’s possible corn prices face a risk of up to 50 or 60 cents, says Mark Gold, Top Third Ag Marketing.

“I don’t know that we know how big these yields can be,” Gold tells “AgDay” host Clinton Griffiths on the Agribusiness Update for Monday, Aug. 1. “I’ve never seen crop ratings this good this late, and I believe we’ve got a pretty big crop out there.”

In the meantime, Gold points out corn contract lows generally occur on the first Monday or Tuesday of the month. “If we’re at contract lows, would I want to be pushing the short side down here? No. In fact, if I’ve sold some grain, I certainly want to be reowning it with some call options out there,” he says.

It’s too early for USDA to raise soybean yields, Gold predicts, though crop ratings also are good and ratings could increase. The crop will rise or fall on August growing conditions.

“The fact of the matter is we’re getting plenty of rain,” he says. “If we get the cooler temperatures later in the month, this soybean crop could be huge.”

Think strategically about soybean marketing at this point in the season.

“Look to buy a short-term $10 put to get through the report because if we do start sensing that there’s rain and cooler temperatures coming, these soybeans could be at $8.60 before we turn around,” Gold says. “The funds are still long 120,000 contracts in soybeans … . That’s a lot.”

Click the play button below to watch the complete “AgDay” interview with Gold.

Want more video news? Watch it on AgDay.
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Spell Check

Chicago, IL
8/3/2016 02:08 PM

  Ray: Don't be discourage by all this broker-government BS that talk their position. Yields will be way off nationally...the damage was done by heat in June and July pollination way before any rain came (if you call it that). Rain totals have been a joke all season nation wide (some way northern parts of the belt are an exception). The GFS weather model has been a absolute joke. ...not mention NOAA being totally wrong on a cold June. Everybody sees rain on internet and assumes rain actually hit the ground...good rain totals never materialize when a high pressure ridge is around. All the rain in world is not going to save yields. These 70 mph USDA crop ratings are absolute joke as they were in 2010 and 2011 The truth will come. BTW I have heat dome right on top of Iowa starting the 8th. The corn crop is not made. Sheeple like Gold don't have a clue.

Ray Dreibelbis
Pa Furnace, PA
8/2/2016 06:17 PM

  Everybody watches the central corn belt and the predicts yields, 80? of the farmers in the NE are struggling with no rain and high temperature. I'm just a dumb farmer but corn doesn't pollinate in weather like this. How can you make a accurate determination. Get outta the classroom and farm for a living.

farmer fred
shorewood, IL
8/2/2016 11:29 PM

  hey Ray- I'm here in N Central Il and, trust me, the yields are going to set records- good rainfall, average temps and even more rain coming up- that's pretty much the whole Midwest. Beans are big and beautiful, too. Prices are only going down from here. Does not bode well for inflated farmland prices, either.


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