Faced with the real prospect of 95-100 million acres of corn next year......

[rickgthf]

If I can book Dec20 corn for $4.15 today and faced with the real prospect of 95-100 million planted acres next year should I be thinking about booking at least some of it?

  Or is it way too early yet?

[clayton58]

Too late. Got close to 4.15  but not quite there in early October   Been down ever since. Sometime it will change and maybe try for 4.15 again. Better luck next time??

[popspoppe]

OK lets look at last year. In May all the talk was that late planting was switching corn acres to beans and the bean market went in the tank and the talk was $5.00 corn. What happened? Corn acres increased and bean acres dropped by close to 14 million acres. 

So in my opinion if the talk stays at 95-100 million acres of corn the price is going no where but down until about July when USDA posts that corn acres were switched to something else. At which time there will be a spike in corn prices. Then in August USDA will announce that even though acres are down 10% yield is projected to be up from the 167 this year to a new record of 193 so overall production is unchanged. At which time the market goes back to where it is now. 

[BA Deere]

If you think corn is going down and maybe 100 million acres planted, then buy a "put" when there`s a glimmer of optimism and it`s cheap. 

There`s going to be contrarians that will plant all beans, thinking a trade agreement will come, maybe 110 million acres of corn will be planted by everyone else.  But some things to consider is farmers that are supposedly having a bad year, won`t have the cashflow to afford to plant corn with the higher inputs.

testweight and storability of the `19 corn crop, 1.5 billion bushel still in the field which is close to the carryover, a bad winter and another wet spring and the carryover is gone.   This < 50lb TW corn is gonna go through cattle and hogs on feed like shinola through a goose.   A hard winter may increase feed usage.  The `19 prevent plant acres might not be farmable in 2020 either.

It`s far too early to be a perma-bear but to each their own.

[erikjohnson61y]

The only thing you can count on is that the market will go the opposite way from any action you take. Sell now, price jumps.  Wait, price crashes... 

[freedom1493]

BA:  Someone said the other day that because of HFT algorithms, etc., it was obvious to them that (large) traders move in sync with USDA reports and everyone else gets left behind. 

I look around at the surrounding farms and the land and what couldn't be grown this year and also pay attention to what the American People are saying....and a lot of them are starting to get real scared about availability of foods because of the wet weather this year and the news reports that the wet weather and flooding will continue into next year. 

Even Mainstream is starting to catch on with articles being written about potential potato shortages, potential sugar shortages, potential high-protein wheat shortages, etc.  When was the last time anyone heard of actual shortages of foodstuffs in America? 

Anyway, this was an interesting take on HFT:

"HIGH-FREQUENCY TRADING IN AGRICULTURAL FUTURES MARKETS"

" HFT has changed the way market prices behave and posed new challenges to the financial system."

https://portal.nifa.usda.gov/web/crisprojectpages/1005769-high-frequency-trading-in-agricultural-fut...

[wrightcattle]

---

@rickgthf wrote:

If I can book Dec20 corn for $4.15 today and faced with the real prospect of 95-100 million planted acres next year should I be thinking about booking at least some of it?

  Or is it way too early yet?

---

If the last 10 to 12 million acres of the 2019 corn crop gets Somewhat harvested by Spring of 2020. ....

Then the 2020 crop will be planted in Drought,  MO. 

And Your $4.15 goes to $6.50 to $8.50 .  Also MO. 

We'll see. 

[sdholloway56]

I'd probably look for some sort of option combo that doesn't cost much leaves the upside open but pays out big if things really crater.

A lot of long term damage has been done to these markets. Trend and above US and SA crops could create a really ugly scenario. I'd defend against the worst and then see how it plays.

You can sell a $4 Dec put and buy 3 $3.60s at a wash, for instance. Don't try this without completely understanding the multiple implications. 

That particular strategy does best when put on when implied volatility is low and the typical seasonal lows are more toward late winter. Although no telling ehere the market will be at that time.