Corn continues its sideways trading pattern unable to break out to the upside. Seasonally this is the time period when bin doors shut and corn moves higher on the premise of fighting for acres. With sufficient supply, there is no reason for the market to show direction one way or another. Corn exports were up and there was a forecast of decreased production in Argentina and the market could only close up $.0125 from the previous week’s high. The trend is definitely sideways until a weather event is seen. A move above $4.62 would give the potential for the market to go back to the December high of $4.686 with the next line of resistance at $4.782.
One should be watching the U.S. Dollar, the March Dollar index closed today at 81.362 and a break above November’s high of 81.56 would imply the potential to move back to the 83.00 level. This would be bearish for all grain exports here in the United States.
We know we sound like a broken record but 2014 is not going to be easy making marketing decisions for corn when prices are at these levels and the crop is not even planted. Producers will have to be diversified in their selling and defend their decisions if the market moves in the wrong direction. It is our intent to recommend hold all short futures positions in the deferred May 2015 contract in an effort to benefit from positive adjustments in the Sep 2014/May2015 spread seasonally suggested from now into spring.
To help producers develop, implement and monitor the various risk management opportunities ahead, we are starting a consultation service where we merge crop insurance with cash sales, options and futures strategies to evaluate and manage risk. If anyone feels they need to put structure into their risk management program and would like to discuss marketing strategies, call Bob or Laura (1-800-832-1488). We will also try to answer questions in upcoming blogs and we welcome emails to [email protected] or [email protected].
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