Why I'm starting to get more bullish corn?
May 09, 2013
As for new-crop corn I am actually starting to become a little more "bullish." Certainly not yet to the point of irrational exuberance, but yes I am thinking about sharpening my bull horns. I know a move more towards the bullish side of the fence may sound strange, especially considering all of the bearish rhetoric, but as I talk to more producers I am starting to become more concerned about our overall "yield potential." Yes, I know its early, and that the USDA generally doesn't give much credence or yield reduction to a late planted crop, but from where I sit today a sub-150 type yield is certainly not out of the question. Especially if you buy into the belief or fact that the corn plant often establishes its pace or "potential" somewhere between "emergence" and "V5-stage."
Keep in mind, for many of the big producing regions, not much nitrogen is on the fields, the corn is yelling "feed me" and there is now some serious weed competition. Also keep in mind most guys are scared to put down "Atrazine" simply because they can't follow it up with beans. I could go on and on, but the point is, overall "yield potential" might be much more adversely effected than many in the trade are estimating. I am not saying yields are determined at this stage of the game, but I am saying our " yield potential" could certainly be in jeopardy. That is why I am recommending that producers stay somewhere between 40-60% priced or hedged in new-crop. I know there is a lot of bearish rhetoric blowing in the wind right now, but I think our best mover is to just hunker down and see how this plays out.
Keep in mind we still have some very big bullish "wild-cards" in the deck in the form of June moisture, July heat, US harvest conditions and Chinese production (Bloomberg reporting this morning that corn output in China may drop as wet, cold weather in their northeast regions delay planting). NO need to get over aggressive on the down stroke!
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