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Frequent Contributor
Posts: 81
Registered: ‎06-05-2013
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Corn Monster: Reducing risk on 2015?

[ Edited ]

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.

 

cornmonster.jpg

 

 

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.

 

the_corn_monster.jpg

 

 

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.  

 

Courtesy of the Van Trump Report

Advisor
Posts: 1,485
Registered: ‎05-14-2010
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Re: Corn Monster: Reducing risk on 2015?

What's is story on e15 will they keep the blending wall or lower it
Senior Advisor
Posts: 2,571
Registered: ‎05-13-2010
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Re: Corn Monster: Reducing risk on 2015?

Big oil isn't going to voluntarily add more ethanol. The retailer doesn't want to add another grade and tanks.

Senior Contributor
Posts: 481
Registered: ‎10-18-2010
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Re: Corn Monster: Reducing risk on 2015?

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.

Senior Advisor
Posts: 3,228
Registered: ‎04-30-2010
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Re: Corn Monster: Reducing risk on 2015?

Corn sales may key off tax management issues, cash flow needs and maybe some schedule selling.