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Senior Advisor

Market is fighting this every step of the way

Fwiw. Posting some corn today and trying to finish beans. The cold weather has taken its toll. In 2015 I had 4X the rain as this year but it was 90 and sunny the days it wasn't raining and the corn just keep growing. I have more thin spots this year because of cold soaking rains vs warm pounding rains that run off.

We need a warm and fairly dry June to turn things around. If not we are looking at average corn at best.

Trade is clueless as mentioned it will take till harvest. The smart money would be charting an entry soon.
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13 Replies
Veteran Advisor

Re: Market is fighting this every step of the way

Mizzou_Tiger,

 

Good to see you weigh in. You must have gone into lurking mode. There does seem to be some naivety, amongst investors, regarding the awkward planting season this year. For a lot of ECB corn the top is off. The year seems to be shaping up with the idea that it might take some fringe states to help make up for losses in Indiana, Ohio, etc. 

I'm also hearing that this year is much like 2010. Not sure how that year finished up, but many similarities so far.

 

Mike

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Senior Advisor

Re: Market is fighting this every step of the way

Here's the thing that is going to bite people. Even in 2010 we had a hot June. I remember it getting into the mid 90's and really getting with it even with all the rain. Long range shows June as cold. That will be viewed as favorable but in reality is going to hurt.
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Honored Advisor

Re: Market is fighting this every step of the way

As I remember.......In 2010, the crop condition ratings were VERY high....right up until harvest.  Lo and behold, as the combines rolled, the bushels did not materialize like most thought  they would.   There were people swearing by those crop ratings and took it on the chin.

Senior Advisor

Re: Market is fighting this every step of the way

170 if I recall
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Senior Contributor

Re: Market is fighting this every step of the way

I can remember 2010. All year long every week on Market to Market the host would say " Everybody KNOWS there is a big, big big crop coming". Things changed . I think they talked themselves into a "big, big crop" mentality without knowing the conditions. Yes we could have a "big" crop, then again maybe not.

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Highlighted
Contributor

Re: Market is fighting this every step of the way

Some other things are going on in the corn market----The Ukraine is looking at hot and dry for the summer-has been already-   They are projected to export 20mmt of corn.   CWG thinks that Brazil has lost 3 to 4 mmt off of their corn crop due to hot and dry in the north and too much rain in the south-still raining.   China is looking at hot and dry in their corn area-more to come.   Personally, I think the USDA is going to lower China's corn carryover to 70mmt from 80mmt.   Their corn usage has been going up 15mmt per year and the USDA thinks only 6mmt this year after China put on a tariff for DDGS.   I think China will be importing corn in 2018.   N and S Dakota are going into drought status-S Dakota was only 200 million bu behind Indiana last year-770+ million bu.   The trade is now talking about 1 t0 1.5 million less acres of corn from Prospective Planting and carryover down to 1.7 billion bu next year with 168/169 yield this year   Chartwise there has been a lot of base building with managed money the big gorilla on the short side.  This market has a lot of room for upside with the downside rather limited-maybe 50 cents after July 4.   Helping the corn is all of the wheat problems-US HRW ans Spring wheat, EU keeps lowering .their estimate, dry in western Australia, Ukraine. Dakotas and western Canada.   Too wet in eastern Canada, way dry in N Africa.   However, there is still alot of wheat around, but carryover is dropping this year.  

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Veteran Advisor

Re: Market is fighting this every step of the way

1.7 billion bushel carryout and we are expecting a big rally?  

 

What prices do you see when Dec futures go off the board?  What cash prices do you expect off the combine?

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Contributor

Re: Market is fighting this every step of the way

Three weeks after the WASDE was saying 2.1+billion bu carryover has dropped down to 1.7+.   The carryout is a moving target until Aug/Sept/Oct.   Chartwise, one has to say $437 would be the first stop and then $5.00, which would form a "teacup" bottom.   I'm saying that there are ongoing situations in the market that can spark a large upturn.   Perhaps the weather will turn benign in the Ukraine, China and the US, the Brazilean Real will tumble, etc.   However, the US acreage may have already dropped to 88/89 million acres rather than the 90 million put out by the USDA., which drops the bushel potential of the US crop.   Illinois did not have very good G/E ratings first time around, northern plains are dry(had good moisture coming in this year) and China is chewing through their cron carryover.   The Crop Progress people will crunch the numbers with each report, churning out estimate after estimate.   The WASDE already dropped the world carryover 30mmt from last year and the corn market has been in a sideways/uptrend since last Sept.   I can certainly see the $4.37 coming before July 4, if conditions continue as they have been.   There is a huge demand base worldwide and the dollar has been in a downtrend.

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Veteran Advisor

Re: Market is fighting this every step of the way

Are you buying corn?

 

What are the odds that we will see the rally?  What kind of money should we be putting on a rally?  If there is a number we can put on the chances of a rally, we could invest some risk capital in it.

 

For my part, I'm hopeful for a rally and have some sell orders in should one occur, but I'm not quite comfortable going long the grains right now.  In my mind I still have more of a producer mentality than a trader mentality.  Maybe I need to release the inner trader and get ready for a ride.  Smiley Happy

 

All the discussion on this site about reduced yield lead me to believe many participants must have be long the market, but I don't hear much talk about people selling the board or buying calls.

 

Is anyone acting on their assumptions?

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