Need Corn Marketing Clues? Watch Oats

December 1, 2014 01:27 PM
 
Need Corn Marketing Clues? Watch Oats

If you grow corn, you might want to watch oats and Minneapolis wheat to better appreciate the market, two analysts say.

Power Hour Noon Logo“In the course of the last little while, oats has begun a selloff of significance, 75 cents,” notes Mike North, Commodity Risk Management Group, on a bonus edition of the “U.S. Farm Report” Marketing Roundtable in late November. “That is just a response to speculative interests coming back out of the market. … If I’m long the corn market right now as a speculator or a farmer with grain in the bin, what should I expect if the speculators decide that they’re going to get out of that same market?

"You would be caught in a very precarious situation, and my advice to producers has been don’t look this gift horse in the mouth on the corn side of things. Take advantage of the carry that’s in the market, the prices that are now 60 cents over where the low was in late September. Do something by getting some sales made and taking advantage of what the market’s giving you. Start looking at next year as well.”

Another commodity to monitor as an indicator is Minneapolis wheat, adds Andy Shissler, Roach Ag Marketing.

There are two kinds of funds that trade the markets,” Shissler explains. “You’ve got the ones that get long, and you get the guys that go both ways. When they start pressing on a small market, you’ll start to see oats give it up, which might be giving you an indicator of the funds that are going to go short and build the short against everybody else … . Usually Minneapolis wheat is another one that does that.”

Click the play button below to watch the complete bonus “U.S. Farm Report” Marketing Roundtable, including a dairy market update:


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