Markets were mixed overnight with corn down 2, soybeans up 3 and wheat up 11. It’s been a wild week in all markets and I doubt that it will be any different in the coming weeks as we continue in uncharted waters.
There are two ways to look at the market after this week’s trade: 1. The CBOT is up 3 on the week for corn and up 20 on the week for soybeans. 2. The markets are still so low that no one can make a profit with cash corn sub $3.20 and cash soybeans sub $8.20. Unfortunately #2 is the one that is the most important when it comes to cash flow, but the fact that we are up on the CBOT is encouraging given the difficult times we are in.
Traders are anxiously awaiting next Tuesdays USDA Stocks and Planting intentions report to see if there are going to be any reductions in the size of last years crop. Producers and traders have been arguing that the USDA missed the size of last years crop and that it is much smaller than reported. If the USDA doesn’t make any adjustments Tuesday, then the trade will have to move on with these numbers. If there is a reduction in stocks or for some reason projected acres, (currently estimated at 94 million) traders should actively take advantage of any rally to get old crop corn priced. If the markets were to rally on any drop in stocks, I believe it will be short lived as it will quickly be given back on a lack of ethanol demand.
Funds are currently short 95,000 corn and long 3,000 bean contracts.
Have a Safe Day!