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Corn comfortably above $8

To end the week, there were not many changes in weather but many different opinions on yield prospects. During the day, Friday, we saw one estimate of corn yield at 122, another one at 134, and a third estimate (looking only at Iowa corn) suggesting 117 for that state. It appears we had a Friday full of opinions which offered some more volatile trading than we have seen recently. Weather still suggests a chance for .25 to .75” of rain across the heart of the Midwest Sunday/Monday with another chance late next week across more of the northern areas. This was not much of a weather change today. Outside markets were volatile with news as well, most of which turned out bullish for corn. Last Friday this market ended strong which lead Sunday night trade to hit 800 but not break it. We would have no problems believing that Sunday night could slightly break 800. It is still tough to believe there are many eager buyers of corn given the recent demand slow down. Right now the question is if demand is slowing faster than weather is hurting supply. We look for fireworks again on Sunday night but do not believe a higher move will result in instant heavy buying…Ryan Ettner

Less Than Expected Iowa: Friday’s chart shows varying opinions on Iowa’s production. The state which was supposed to help carry the drought areas is now coming in less than expected when crop tours get in the fields…Rich Nelson

 

Working trades:

(7/16) Sold December corn $10.00 call 10, risk 30, objective 0.

We have what looks like a good “tight” supply of cash hogs right now. Packers are trying to secure numbers for later next week and are still being a little aggressive. Friday’s chart shows we have one more week of tightness left here. By the dnd of August, hog supplies will be on the rise. The big jump in supplies really hits home in October. Our net message here is not to get bullish on this “last chance” summer rally. Keep in mind hog prices are determined by the supply and the demand for hogs at a certain time period. We are entering the tough time of year for pricing from here on out. Producers should finish up sales over the next few days. Speculators should shift to a bearish opinion around the first week of August (using October and December futures)…Rich Nelson

 

Trade Recommendation:

(7/25) Sell October 83.00, risk 84.67, objective 80.70.

 

 
Rich Nelson
 

Director of Research 

Allendale Inc. 

4506 Prime Parkway 

McHenry, IL 60050 

815-578-6161

Hypothetical performance results have many inherent limitations, some of which are described below.  No representation is being made that any account will achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.  One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight.  In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading.  For example, the ability to withstand losses or adhere to a particular trading program in spite of trading losses are material points which can adversely affect actual trading results.  There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

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