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Mascoutah, Illinois | We do not have a definitive number on corn yield and the market is taking a breather here, waiting anxiously as combines start rolling. Folks in the hedge fund community have to make money and the hot sector is grains including coffee. (You can throw crude out the window unless we get a major hurricane in the Gulf of Mexico.) If a hedge fund doesn't make money, redemptions kick in and your fifteen minutes of fame ends abruptly. Are you going to go hide in the bond market? Not. The stock market is having its difficulties. The hedge funds see a hot sector and have to play ball.
The scuttlebutt is more wheat acres because of price and an earlier harvest than last year. The bidding war should be corn trying to take away acres from beans next spring. Corn carryover could be below one billion bushels and even as low as 800 million in my opinion. If we grow consecutive crops in 2010 and 2011 under 160bpa, we will have armaggedon upon us.
The other side of the equation is we will have a crop north of 165bpa, the dollar will continue to strengthen versus the euro, and an economic collapse could be close at hand.
I will say it one more time. I believe the highs are in until the end of November. Longer term, I am bullish assuming we do not have an economic collapse.
Just my two cents. Make transactions that best fit your operation.
Edited by djmcountryboy 8/24/2010 00:34
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End users get ready......
