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Senior Advisor

Wishful thinking or maybe just maybe

Yesterday was the day that changed the course of grains

I don't look for a huge monster rally this summer but I do think that the weather issues to date are slowly eating away at bushels and the forecast is wet for most of the cornbelt starting next weekend. So we may be looking at June if you don't get it planted in the next 7-8 days.

I still contend the bigger rally won't take shape till harvest and will be a nice one going into winter and spring.

We are not awash with grain if you look at stocks to use. It only takes one bad week this summer to make what was once a pile of grain turn to morsels.
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4 Replies
Veteran Advisor

Re: Wishful thinking or maybe just maybe

You are right that we could see a rally this summer.  Based on past history, we could see something building right now into June.  After mid-June, maybe some hope into the 4th of July.  After that, prices usually go downhill.  Most years.

 

That doesn't mean we WILL see a rally, just that we could.

 

My marketing plan is based on $4 corn, maybe $4.20.  More than that might take more weirdness that I see.  Beans, If I get 20 cents up from here I'm selling Nov.  If it gets better than that, I'll sell some more.

 

What worries me is what if we don't get a rally.  I'm afraid of losing a nickel at a time until I've lost all the market was willing to give and then what?  So if we don't see something promising in the next 30 days I'm going to be tempted to start selling.

 

At this point, I look at harvest as a separate issue.

Senior Contributor

Re: Wishful thinking or maybe just maybe

I also believe this theory however this market is so tight. They refuse to give a nickel when it should be a quarter. On the other hand every chart I see fights back a penny at a time to lose 30 in a day.? Can someone please remind me of the last limit UP.?! I can recall a few down, but that's just me seeing it I suppose. My advice ( not that it's worth much more than breaking even) Caution. Grain market so upside down never know anymore; not that anyone ever did. I kinda like Dec. corn and soybeans, wheat is just not close yet. Maybe time will tell GL
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Veteran Advisor

Re: Wishful thinking or maybe just maybe

MT.....I have similar thoughts that we will have to work this bulge of old crop supply through the system......once it becomes known that the system can handle the next crop without piling massive amounts on the ground will bring a change of market attitude.

 

Earlier this week, I was reading info about low volatility in the equity markets, with much of the blame based on the algo driven trading mechanisms....perhaps we are dealing with something similar in grains

 

probably never a better time to have some "upside insurance" in place than when the market has everyone beaten to a pulp and financially ill-equipped to invest in some option coverage

 

Ray J

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Honored Advisor

Re: Wishful thinking or maybe just maybe

In wheat ............... nearly 4 years.

 

last piles of corn out west are disappearing quickly.  Except for that pile on the left.  That 50K will not find a home.

 

IMG_0897.jpg

 

 

Such a wasteful process...........

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