Only a few of the market advisers we track have new-crop cash sales on the books (see chart), but any spring price strength might signal the time to make initial sales if you haven't already.
"I hope producers do have 25% or 35% of their crop sold,” says Bryan Doherty of Top Farmer Intelligence. "If so, I wouldn't be in a hurry to initiate cash sales, though I would buy $4 or $3.90 put options.” Consider selling July or December calls to offset part of the premium cost, he says.
"However, if you have no sales made, I'd be proactive and get some sold, hoping they'll prove to be the worst sales you make,” he adds. "It's easy to see how corn could range from $3 to $5, and we are in the middle of that range now.”
Bob Utterback notes, "We may get a slight price rally in April or May, but I think December 2010 corn is going to find it hard to get back to $4.15.”
Key Market Factors
> Floods hit as snow melts, especially in Northern Plains
> China cancels U.S. bean orders
> Wheat takes on feedgrain status
> Watch where the acres wind up
Click here for the Adviser Track Records table (Percent Sold and Market Value on Feb. 2, 2010)