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Waiting for weather

Agriculture.com Staff 06/08/2007 @ 7:53am

June is here. It is a time of the year where usually weather conditions are not too wet, dry, cold or hot for crop conditions. .

The corn market has probably echoed this sentiment by trading in a sideways range for the last two months, as prices fail to push above resistance, but find buying interest at support. Typically, prices trade in a range-bound to lower pattern over the next 15 to 30 days. Historically, the fourth of July has acted as a swing point for prices.

History indicates in some years' prices peak in early July due to a dry June, while other years find prices bottoming on adequate weather. Weather will dominate price action from this point forward. Expect volatility to develop in the weeks and months ahead. Demand for bio fuels is the underlying driving force behind supportive price expectations. On the other hand, increased storage capacity, as well as expectations that economic forces will increase supply, will keep prices in check if weather is not an event. Be vigilant and stay on top of this year's market. Be strategic! Do not be surprised if corn or soybean prices move dramatically higher, lower or both.

Our pressing concern is for those of you who are blindly bullish or bearish. Our encouragement is for a balanced approach. Make cash sales and use a fixed risk CALL strategy to participate in a bull market to cover cash sales. Buy PUTS to cover unpriced bushels. Until weather is more of a factor, expect price consolidation, but expect big price swings as the heart of summer approaches.

If you have any questions or comments, please contact Top Farmer at 1-800-TOP-FARM, ext. 129

June is here. It is a time of the year where usually weather conditions are not too wet, dry, cold or hot for crop conditions. .

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Soybeans Rally on Demand, Weather