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.