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Alton, Ia | My opinion, and remember, that and 50 c gets you a cup of coffee, no more, is that the current weakness is two things: Technical indicators yesterday especially, and steepness of trend. Yesterdays losses were accentuated when sell stops were hit, and it just kept rolling. The second is a longer term issue. Funds are out for a percentage of returns. They do not care at what levels the markets are, they are looking for steepness of the line. This gets them the percentage returns they need to keep their investors happy. So when the trend starts to go flat, they need to get out and put the money into other moving price areas. They don't care if corn is 3, 4 or 5, they only care if they made 15, 25, or 35% return. They LIKE volatility.
Fundamentally, we are a LONG way from the finish line. I'm sure the CBOT crowd heard this yesterday, but down south progress is way ahead of normal. TX 53% planted /42 normal, AR 45/15, MS 76/20, so that's a bearish fact. (Now I'm not sure how they account for potential acreage increase when figuring percents, so hmmm.) But, the great majority of our corn is in the I states, and most of them are wet right now. We are app 185 days away from October 1, that's a long time. Even if we get the PROSPECTIVE PLANTED acres, those numbers can change up to June 1. Then we need trend line yields. Then we need good harvest weather. I think, and again, my opinion, is we'll see another rally in April to keep the corn acres. The reports I've seen have the corn acres at the bottom end of the numbers needed for safe carryover, so any defections will have an impact. Add in any planting delays and yikes!
So, mid term, ie this summer, I still think we'll see higher prices. It will be interesting, that's for sure, and hopefully a good AND profitable education for us all.
Gotta go, hauling corn to town, good chances of rain rest of this week. | |
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Ok folks where are we headed from here?
