Don't Be Bullish on $4.30 Corn in December, Prepare for Summer Rallies

April 5, 2017 11:09 AM

In the USDA Prospective Plantings report, the agency predicted there will be 316.9 million crop acres planted, down 2.3 million acres from 2016.

If, and only if, there are no major weather hiccups in 2017 and there are at least trend line yields, Bryan Doherty, senior market advisor for Stewart-Peterson, says since there will be fewer corn acres, carryout will tighten, but there will be a downside.

“The market will view that as adequate,” said Doherty. “Unfortunately, that probably means limited upside potential. My suggestion would be, as a producer, recognize that with the stocks and acreage numbers today, we’ve tightened the noose a little bit.”

Doherty says producers should be ready to act.

“Don’t turn bullish when corn hits $4.10, $4.20 or $4.30 in December,” he said. “Be selling into that high probability, because that’s where prices will probably peak.”

Dan O’Bryan, risk management specialist for Top Third Ag Marketing, thinks a market mover could happen in a few weeks.

“If it stays wet and cooler, that could delay guys from getting to [plant] corn,” said O’Bryan. “You got to wait typically until sometime in mid-June and heading towards July.”

Doherty said more than half of the time, corn markets peak in either June, July or August as we chew through supply.

“Be prepared for those rallies when they come,” he said.

Watch O’Bryan and Doherty discuss South American rain, hog numbers, and milk prices on U.S. Farm Report above.

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Kenny Wiens
Lyons, KS
4/6/2017 01:28 PM

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