Grain Markets

Markets 9/2/14 @10:55am

Dec Corn -3/4 @ 3.64

Nov Beans +11 ¾ @ 10.36

Corn story continues to look the same with estimates talking significant supply. The bears continue to talk about a humongous US crop that is receiving almost perfect weather conditions.  Many analysts are still pushing their yield estimates even higher, and many US producers are reporting “better than expected” yields, placing even more downward pressure on prices.

Beans continue to focus on old crop, however bears focus on the longer term picture and that’s the record yield estimates in the US and the anticipated 5-6% additional acres in South America.  Which doesn’t paint a pretty picture for new crop prices.  I don’t want to sound so pessimistic but we need a technical rally, or some bullish news to change the direction of the market.

Idea – for producers with a current hedge in place, a great way to add some additional dollars to your bottom line is to take advantage of the “carry in the market”

FOR EXAMPLE  if the producer can store CORN until June, they can roll from Dec to July and pick up 27-28 cents

What about basis?

The biggest news seems to be current basis levels, as it seems like commercials are having a time sourcing the bushels they need at the current price levels.  Pre-harvest bushels have been bid at a premium.  However…. come harvest time, old crop bushels and new crop bushels are one of the same and the biggest risk to producers could be the upcoming harvest basis.

Idea – If producers have old crop corn or beans it seems like the perfect opportunity to liquidate some of that stored old crop while basis levels are so strong.  The bean basis appears to be the strongest, come harvest times basis levels may slip rather quickly.

For more information contact:

Greg Mockenhaupt

Risk Management Consultant

Central Valley Ag – ProEdge

1007 County Road O

Oakland, NE 68045

Office: 402-685-5613

Cell: 402-380-9855