East Central South Dakota | Old crop corn had December HTA's and rolled to July at harvest for a loss of 2 cents. Basis was -35 now +30 so did alright there with basis on the roll. Currently delivering on those. Had some forward contracted early and too cheap--- delivered in February, sold some spot this May and have some unpriced gambling stocks still in bin (probably too much). Soybeans sold some in January and have some gambling stocks left. New crop unpriced in both corn and soybeans. Can store my crop at harvest. I have 16 months (or longer) to do something with new crop and today it looks like insurance price on phantom bushels of dreams unrealized. Market feels weak considering fundamentals and the old saying "markets can remain irrational longer than you can remain solvent" isn't really as applicable today with grain storage and the condition of the farmers balance sheet these days.
Look to the recent performance of hard red wheat for clues to market reaction to weather for corn and soybeans. Not a ton of farmer storage in wheat country and they are going to get all the harvest wheat as cheap as possible. Wheat is more thinly traded and easier to steer than corn or soybeans----but still, one might have to have storage at harvest to see basis move grain and the market to wake up to current fundamentals. If it rains and we come in at mid 170's for yield, marketing opportunities are loss for probably some time. Decimating world conditions would have to show up. One nice thing about this dry period is the people out west are finally getting some moisture and good for them. They paid their dryness dues. |
Market mentality (managed money) drives direction...
