Buy the rumor, sell the fact reaction in the markets yesterday resulted in the soybeans selling off which pulled corn lower. Chinese soybean sales numbers that were not even close to the 5 to 8 MMT rumors that came from last week’s meeting had traders in a sell mode. In positive news the Chinese did announce that beginning January 1, they would suspend their tariffs on $126 billion of US automobiles and products. This is another confirmation of the Presidents promise that tariffs on US autos would revert back to the 15% level before the trade war began.
I would advise producers to start looking at making sales for October/November of 2019 at the current levels. We are currently in the 70th percentile for the last five years with current prices in the $3.70-3.75 range. Any sale that can be made at or above this percentile is strongly recommended. If we increase corn acreage in 2019 by 4-5 million acres next year and drop yield back to 175 bpa we could very easily push next year’s carryout over 2.0 billion bushels. This is why I would advise producers to have a minimum of 20% of your fall corn sold at this level.
Have a Safe Day!