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SC Iowa | cash corn----the volatility in futures, spreads and basis levels continues to ratchet higher. After the action in July vs. Sept/Dec spreads on Thursday and Friday, I can understand if more cash bids get rolled over to the September contract in the coming week instead of waiting until June 26/27.
I'm a bit surprised at the amount of hedged corn in the hands of commercials that I am hearing about in some parts of the midwest. They've obviously done a good job up to this point and have some big basis profits in hand; how they play it from here is anyone's guess....but some large volumes were traded this week and the hedgers were far from out of bullets.
It's not like that all over----some areas have limited ownership by the hedger.
Farmer continues to be the driver, and the owner, of the bulk of remaining corn supply. An elevator manager was telling me how much corn he had in his space that was still on warehouse receipt....equated to 15% of what he sells to us each year....doubt he is the only one in that position....if corn was $7.50-8.00, the owners of that corn would be a lot more "chatty", but since that is not the case, the dial is turned down a bit on discussing ownership which is costing them 3-4 cents each month in a flat market....
Brazil corn into US-----was getting a bit more press late in the week.....if true, would go into east coast ports for feed milling late summer/September
Ethanol-----once again, late week chatter about a variety of things.....ethanol plants choosing to sell corn back into the market vs. running all summer; was a news story about a Nebraska plant suspending production.....Jeremy Frost has done a good job of outlining ethanol coverage....some have it, some don't, and there must be a lot of "fence sitting" about late summer production rates
Fertilizer-----was an article in Financial Times this week about prospects for increases in global fertilizer production over next 2-5 years. A lot of money all around the world is being put to work expanding N/P/K production---to the point that some projects have been slowed down as they see too much capacity coming on too quickly...
Sounds like better pricing opportunities for the farmer, but expect plenty of ebbs and flows as projects this big can have market disrupting features.
Rainfall-----we were blessed with some rain in southern Iowa Friday night....took about three different waves, but picked up 3/4 of an inch in SW Marion County....lot of scattered and varied amounts....here's hoping you get what you need to keep your crop alive and growing as we head into the peak of the growing season and water needs.
Ray J
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TWTWTW....
