The markets opened sharply higher again this morning as the short positions have gotten nervous and are beginning to run for the exits. The funds are still excessively short the markets and the need for additional weather premium has helped spark the short covering off of Mondays lows. Weather forecasts for the 7-15 day show heavier chances of rain in the front half with chances, but lower in the last half. Planting progress could jump significantly in next Monday’s report with the progress producers have made so far this week, but when the storms actually arrive will dictate have much. Unfortunately a production issue is exactly what we need with our current oversupply.
Producers have been actively making sales of old and new crop over the last three trading sessions and this should continue. Anyone that is sitting on old crop corn or has less than 40% of their new crop sold needs to remember that weather markets are short lived and eventually come to a sudden end. These sudden ends usually do not heed much warning. Producers can currently lock in new crop sales for next spring between $3.80 – $3.90 and should be actively taking part in these markets.
Producers should also be putting in firm offers with their buyers. The markets trade 17.5 hours per day, which is more than anyone can watch the market. By putting in firm offers, you have the opportunity to get contracts filled when you are too busy to watch the market, even in the middle of the night. Firm offers allow you to take some emotion out of the decision making process. Give us a call today to set your targets.
Have a Safe Day!