06-21-2011 09:45 AM
I recently got rid of my remaining soybeans for $13.60 delivered. I got $14.14 delivered a few months ago, so while the price is great and I'm not complaining, I could have done better if I'd sold in the winter.
I have 4-5 loads of corn left as gambling bushels. I'll probably keep them for a while, because they are gambling bushels and I don't see corn taking a dive like 08. If it does, then I'll join the group of people who pre-sold 2011 corn for $4, but I'll have to admit I passed up better money. Whatever.
The question is what about the current crop? Will it get to $5? Will it get even lower? Should I be selling now? I manage to market poorly most of the time so there is no reason to change. My current inclination is to not hedge any 2011 corn for now. I have a little sold at $6.75 delivered in December. I have the storage. I'll need to sell some for cash flow, but I usually sell soybeans for river close so that is my winter cash flow income.
I posted in Crop Talk that the corn around here is waterlogged and yellow. Few are in the field with sprayers or fertilizer. Of course, conditions will improve, but the question is, can you put the yield back in after the edge has been knocked off? I wonder. I think the crop around here is under trend line as we speak. Good weather will bring it back, no doubt, but it's still late so we don't have lots of slack this year. Too many variables. I'm not selling much. It's always nice to have a solid reason for being wrong.
06-21-2011 10:48 AM
I think you are correct about the corn crop. People are underestimating both the unplanted corn acres in places like the Dakotas, and the lateness of planting on yields. The odds favor the upside more than the downside IMHO. Take care.
06-21-2011 02:01 PM
kinda figure we're close to the middle of the modern long term trading range on corn.
Deal should be higher tommorrow, then set back 60 cents into the weekend ( 30 cent lower net vs Mon close).
Just stair stepping to perhaps the $6.25 to $6.40 range cash middle ( crumby basis area ).
Market should trade both sides of the afore middle by 14%.
Puts the bottom in the $5.25 cash range ( same crumby basis area ) , top in the $7.25 cash range.
The "flavor of the year" so to speak trading luster is off this market.
Crude oil trending lower and should end up in the long term $70 pb range there.
Refinery to Pump gas margins have a high chance of getting set back to reality.
No excuse for a week of national avg gas prices in the $4+ range with the $100 pb crude this year.
$100 crude works out to $2.75 to $2.80 gas using the 2008 margins.
$146 pb crude the resulted in some national avg gas price weeks of $4.11 pg then.
$70 crude may result in some future gas price weeks below $2.00 ( that's the only way the oiles gonna regain some econ thus demand share ).
06-21-2011 03:04 PM
Right, With the media's constant hits on ethanol, it amazes me that the point you hit on was not covered. 100 dollar crude does not equate to $4 gasoline. The basis on gasoline futures and spot prices is historically way out of line. Now, there may be some reason for this (refinery problems?). But, if not, those high margins just made the US economy take a huge hit for reasons that are not related to supply and demand issues.
I wish I had the numbers, but isn't every fifty cent increase in the price of gasoline, taking a trillion dollars out of the economy?