The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Andy is a seasoned grain market analyst and the senior account executive at Walsh Hedging. His main focus is assisting producers and end users to better hedge their investments through his various market strategies over his years of experience working on the grain floor.
May Corn 6.42’ 5’4
May Soybeans 1355’ 10’0
May Wheat 636’2 6’2
By: Tony Marcucci
We’ve been experiencing a choppy two sided trade early this morning after trading significantly lower over the course of the last couple days. Wheat and corn were pressured lower mid-day and into the close while the beans found support on ideas that China demand will remain strong and fears that planted acreage will not increase much from the USDA Outlook Forum. I have been hearing from my producers there is a lot of grain left in the bin which the market could be overlooking currently. As this unusual hot weather pattern continues, it could force a lot of this grain to start moving in the coming weeks creating a “harvest” selling pressure in the market, also affecting the USDA’s quarterly stocks report at the end of the month. I believe farmers are willing to take the excess risk of a frost this year and plant early. The risk/reward last year of not planting by April 15th had producers holding out till June proved unrewarding. The added risk of not being covered by crop insurance and planting early is marginally low at this point since we have not experienced a significant winter. The larger risk for producers would be to delay planting till June. I believe if we have a similar weather pattern as last year and are able to get the crop in early, we will be substantially lower in new crop corn this year. We are going to have a weather market as we do every summer but the question on everyone’s mind in here is “from where”. We see some great opportunities to use options to put revenue floors underneath to ensure we are at least operating in the black for next year. We also see some good opportunities for speculating using options to capturing a good risk/reward in the market. Give us a call if you want to hear more about our option strategies. (800)993-5449
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