Word of the day or should we say days = VOLATILITY!! The corn market opened 10 higher this morning and in less than 30 minutes is trading 2 higher. Soybeans traded 18 higher and are now down 10! I look for these huge swings to continue for a while until we see some break in the export news. Ranges are expanding with the higher prices. Yesterday saw a 40-cent range in soybeans, with a hard technical break after the US export sales data was digested by the trade. The market has made a habit out of selling off as soon as the numbers are released in the AM. The strong exports in both corn and beans should lead to higher prices, but it’s definitely not going to be easy or straight up.
China is said to be putting together a purchase order of 6-8 mmt of US corn. 2-4 mmts of new purchases have already been completed this week, and there looks to be another 4 on the horizon. It appears that China will book closer to 22 mmt of corn vs the 12 mmt the USDA is expecting. The export program out of the US is like nothing we have ever seen, especially for corn. The reality of these sales is that they have been in the works for a few weeks and were probably executed weeks ago and just now announced.
The new crop corn trading is much less volatile and should stay that way. With the expectation for large, planted acres this coming spring there is little reason to rally that market.
Unfortunately, producers that are sitting on unsold old and new crop are going to drive themselves crazy trying to pick the top in the market, which is not possible! You have a better chance of losing 50 cents than you do of hitting the top. Bottom line = make sales because prices are profitable, and you can reduce stress levels.
Have a Safe Day!