As May marches on and rain continues to fall in much of the Corn Belt, late planted corn becomes more of a reality. While it’s not May 20, what some consider the “do or die” date for corn, the weather scare is providing market volatility and with it, opportunity.
“Right now, we’re actually seeing some volatility,” Steve Georgy president of Allendale Inc. told Clinton Griffiths on U.S. Farm Report. “How quiet have these markets have been over the last several months? Now we’re getting some volatility and we need to focus on that.”
Farmers are sitting on a lot of grain, according to Georgy. He said grain needs to move into commercial hands and as the markets react to weather they, combined with improving basis levels, may provide an opportunity for cash sales.
“We know this weather situation gives hope you can improve some things, but if we get this price to react we need to be taking advantage of some cash sales as well,” he said.
Mike North of Commodity Risk Management Group said producers need to be realistic about the price they’ll take for corn.
“We get calls all the time from guys that looked at $4 corn and turned away,” he said. “You cannot turn away from $4 to $4.10 corn. If we get a bounce back, they’re coming off of a $3.70 and change market, you better do something with that because statistics have shown us over the last five years that if you did something with $4 plus corn, it was probably your best effort.”
If producers pass up $4 corn now and the summer turns out to be mild, late planting won’t be a big issue and like 2018 and we’ll end up with a big crop, he added.
“You’re going to be staring at $3.30 [to] $3.40 corn again, because in the last five years, we’ve always gone to at least $3.40 in the December futures at some point in the calendar and you’ll have missed it again,” he explained. “Get on it.”
