I hope this week has gone well for you. My week has been busy with travel the first two days and my son Toby’s 9th birthday on Wednesday. It’s crazy how time flies! Speaking of time flying, we are looking at 50 degree temps this week…after sub-zero just a week ago. It feels like spring! It won’t be long at all before the planter is rolling, so we are trying to get everything ready to go. In all honesty, if the spring is warmer and drier like some of the forecasts have suggested, we might choose to plant as early as we ever have. When we do that, we could be forfeiting our insurance on re-plant, but given the successes of early planting, I might be willing to take the risk. I’d like to hear your opinion on something like this…or simply to tell me how things are running for you. Stay in touch. email@example.com
The corn and bean markets saw both sides of unchanged on the overnight markets…while we had buying going into the end of the session, the day session was even better. Both corn and beans were strong and settled closer to the upper end of their range. With weather in South America less-than-ideal and continued dryness forecasted for much of the corn-belt, weather has been a big factor of late. Outside markets should have had quite a positive influence on Wednesday. March crude was up $1.55 on the day, closing at $63.22. The DOW also closed up 424 points at 31,916. The Dollar settled quietly with a gain of .003…at 90.170.
Corn – The corn market has had a good day once again with solid gains. March corn closed up 5 ½ cents at $5.59 ¼. This was a penny and a half off the high and 7 ¼ cents off the low of the day. The EIA report from the Department of Energy was a rough one, but this was mostly expected as many ethanol plants shuttered with the natural gas shortage and runup in prices. We only burned through 67 million bushels, which is 28 mb under last week’s total. However, stocks were down sharply as the lack of production and ever-increasing driving has allowed for plenty of ethanol to be gobbled up of late. Producers should be ecstatic with price action as corn continues to work back towards the highs. With Dec corn making new highs, concerns about new-crop profitability should pale in comparison to recent years. With the spring average pricing period over on Friday, it appears we’ll have a spring price pushing $4.60, which will certainly be the best we’ve seen in 8 years. While I’m not bearish corn, it’s tough to sit on our hands when looking at these profit margins. For old-crop, I’m unlikely to sell my final 20% anytime soon as I could envision a larger scale rally and strong basis this summer as some areas potentially run super short on corn supplies. On new-crop, getting to a third sold at these levels of profit margins makes sense….especially with flexibility built into your sales.
Soybeans – Soybeans had a nice overnight market and a better day trade as buyers continue to show up. March beans ended the day up
17 ¾ cents at $14.23 ¾. The close was 2 ¾ cents off the high and 17 off the low of the day. While the bean market surged on Tuesday, up 40 cent
s at one time, we saw a sell-off and 19 cents of the gains given up with March closing up 22. On Wednesday, we got those gains back and settled in strong fashion across all of the contracts. In fact, November beans continue to make new highs on a daily basis. With a close at $12.38 ¼, it’s almost hard to fathom we are trading about 60 cents above the current February average for crop insurance. While there’s no way to know just what our average will be, it appears we’ll be solidly in the mid-$11.80s. This is great news for bean growers and appears to be an attempt at buying acres at a time when bean carry-out, both old and new, appears to be rather snug. I like selling a few new beans and getting to 30-40% sold given how robust profit margins. The last thing I’ll say is something my mentor Dr. Good, who is retired from the University
of Illinois had told me. He said “when you’re trading safely above the spring insurance price, it makes great sense to sell some fall crops.” Considering he is certainly as sharp marketer as I’ve known, for my farm, I believe I’ll heed his advice.
Call us if you want to talk positions or strategy…or simply bend our ear. If you want more information on the markets, be sure to visit my team’s website at https://agmarket.net/
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