Corn started the day weaker before making its way back to double digit gains. December corn ended up 12 ¼ cents at $6.86 ¾, November beans up 16 ¾ cents at $13.88 ¾, and December wheat up 5 ½ cents at $7.34 ½.
Crop ratings were down as expected yesterday and ultimately proved not to be a major factor given the market ended up starting out on the weak side this morning. As the day progressed, the US dollar fell sharply making its way towards the low. This helped spur commodity rallies across the board, crude oil, cotton, grains, etc. Overall I think the rains we have had combined with the forecast could turn out to put more downward pressure on the market. Right now the strongest demand we have seems to be in the futures. We have witnessed demand destruction in the ethanol numbers, as well as the livestock. For us to remain priced where we are in the global market I believe we will have to end up seeing another sharp break in the dollar, or further weather events to lower yields.
The rally has been hinged on money coming into the market from a dollar collapse, or adverse weather events, and if neither of these happen we could see the market start to correct. We are coming to a point where producers will be thinking about what they are going to have for bushels over and on top of what they already have sold. And this is the first time in a long time we have willing sellers starting to enter the market again. Will the bulls be able to continue to provide this support?
It is a good idea to go over your hedges again to make sure your operation has adequate coverage. If you want extra protection on bushels expected over and on top of your guaranteed production, please call your broker to go over some put strategies.