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Veteran Advisor
Posts: 6,101
Registered: ‎05-13-2010
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The next 90 days

Maybe this week...maybe June 29th....sometime during the next three months or so, most producers will get a chance to clean out their bins of old crop corn and soybeans, and contract new crop grains at a price that will allow a breakeven for the average producer.

That is my prediction. Know your needs, and be ready to pounce.

 

My thoughts are that we will see cash corn of about $4.50 for a day, or during the night session, at least once, and $11.00 soybeans for a day or so. At the time, every indicator will seem to be bullish and you will feel foolish selling, and probably won't.  The hardest move will be to sell the next few days after the market breaks, at a price lower than what you could have set the day before, the week before, etc. This will undoubtably prove to be a huge mistake, too, with market history as a guide.

 

Few dreamed that we would get to $5 corn last spring, and it was there for about two weeks, and then it was a steady march down to $3 and big losses. Same with the $15 soybeans. A lot can happen in a few months, and this is the time that will make or break you.

 

If you need $5 corn, and $15 soybeans to stay in business, you probably are not in a good spot and should seek some financial adjustments and help. You probably are not going to make that scenario work.

 

my two cents.

Advisor
Posts: 12,996
Registered: ‎02-06-2014
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Re: The next 90 days

That's the seasonal tendency and for most of recent years the gubmint has been pretty generous in their Mar 1 acres estimates.

 

The problem has been that there seems to have been a temptation to look the gift horse in the mouth.

 

If planting progresses quickly as now seems possible, we may not get a huge spring bump. But given the dryness that might imply, I prefer to roll up some puts and leave the upside open. The market seems pretty well balanced between adequate supplies/ technical sloppiness and a huge, inelastic demand base that needs to be fed. Upside is signiificant should a real threat emerge.

 

The cost of puts makes a pretty decent dent in the smaller margins but sometimes it is best to play not to lose. Worst case scenario is probably mediocre pesonal yields and mediocre price that stays aboe the put level. That would be a disappointing year, but not disasterous.

 

 

Honored Advisor
Posts: 17,174
Registered: ‎05-13-2010
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Re: The next 90 days

2014 is in my rearview mirror, but for new crop, I can`t believe that we`ve printed either the highs or lows for corn or beans.  I think if we do get to the coveted  "4 and 10" there will be a slough of sellers after the waterboarding that we`ve experienced in this first quarter.

 

What circumstances would occur that would give us "4 and 10" (drought threat?) might spook us from selling were it come about.   I guess what we want is a timely planting and good growing conditions ahead with a 4 and 10 new cash price...that is probably asking for too much   Smiley Happy