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10-24-2013 07:38 AM - edited 10-24-2013 07:38 AM
Corn continues to trade in a sideways channel, essentially a $0.10 cent range since Oct 8th. The problem for producers is the fact most rallies continue to be capped by heavy sell pressure.
Keep in mind during the past two-months prices have tumbled about $0.80 cents per bushel, and during the past four-months prices have fallen by close to a $1.30.
Point is most any type of rally is going to feel like a gift and evoke some type of sell pressure from a demand perspective ethanol production continues to remain strong, and we are starting to become a little more competitive on the global export side of the equation, but we still haven't made a ton of traction.
Maybe this morning’s export sales data will help shed some light. Technical traders still want to see a close back above $4.50 in the DEC13 contract before they start talking about any type of short-term turnaround or bounce.
I should note that I have been hearing more talk from producers about longer-term price and profitability concerns, in fact several are starting to place small hedges vs. the DEC15 contract each time it pops it head back above $5.00. This is still a little far out for my blood, especially with South American and US corn producers looking as if they will plant fewer acres in the upcoming season.
But for those producers who are irrigated and can almost guarantee their yield and overall inputs; trying to lock in a profit and reducing risk on small percentage of the 2015 crop can't be all that bad of a move, certainly something worth keeping your eye on as we move forward.
10-24-2013 03:20 PM
On the other hand:
“This is still a little far out for my blood, especially with South American and US corn producers looking as if they will plant fewer acres in the upcoming season.”
Yields can go to TREND or above and by far make up for any deciles in acreage. Dies a but less from SA matter.
“Corn continues to trade in a sideways channel, essentially a $0.10 cent range since Oct 8th. The problem for producers is the fact most rallies continue to be capped by heavy sell pressure.”
Corn has been falling for over a year, it rests and falls more, so far. Does a 7 day sideways say anything, it hasn’t for 16 months.
Why are selling capped rallies a producer problem- I think you miss the reality, misinformed, good marketers - producers, sell rallies . Everyone isn’t unsold.