Grain markets flat prior to supply and demand report
May 12, 2009
Overall, grains were flat today prior to tomorrow’s USDA Supply and Demand report. Expectation is that bean old crop will get tighter but not much change is in store for corn and wheat.
Weather has cooperated with a couple of dry days here in the central and eastern Corn Belt but wet spots persist. I expect to see some tractors moving tomorrow but with rain projected for mid-week not much field work is anticipated. Expect producers to start planting around the wet spots. Some producers are already making plans to move from corn to beans. Looking forward, I have to expect corn acres will get closer to the 83.5 million acre level and beans closer to 78 million acre level.
Expectation: Corn will be choppy with a positive bias. Would suggest all producers with net short positions strongly consider moving into a put format. As for beans, old crop will remain bullish and new crop bearish. If the July to November bean spread would correct back below $1.00 consider repositioning going into July.
A heads up: All corn speculators who like spreads should start to watch the corn spreads if we see them invert over the next few weeks because of concern about getting corn planted.
If you need any help in implementing a speculative or hedging strategy give us a call at 1-800-832-1488 or email me at firstname.lastname@example.org or email@example.com. Tomorrow we will talk a little about the bonds, gold and crude oil.
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