In recent days the corn market has weakened, trading the fast-paced U.S. planting progress. This is complicating risk management plans, as farmers try to decide old-crop marketing strategies while preparing to put a new crop in the ground.

With Illinois as much as 40% planted, and other states ahead of average paces, a fast planting has many expecting an early 2012 harvest. 

As a result, weather premium is being taken out of the market and the nearby CME Group May & July corn futures contracts have lost some of their gains over new-crop December futures.

To Sell or Hold

With corn prices threatening to fall into that $5.00 per bushel range, farmers are faced with taking the bait of selling already-stored crop now, gambling that an early planted crop will be ready in late August, or simply waiting for new-crop prices to catch fire on demand or some other fundamental.

"Still have old crop corn, waiting on a rally to $7. Chinese rumor again today where is the rally? I have sold new-crop beans out of the field at $13 plus.  No new-crop corn sales yet, but I have enough storage to keep it all into 2013. I will wait until later this spring/summer to price," Agriculture.com Marketing Talk member docharing says.

Meanwhile, Marketing Talk member Pat in CMO decided to take last months's corn price. "I sold last month for April delivery. It always feels good to know you sold higher than the price at delivery time."

Old Crop vs. New Crop

Once trading as high as 20-cents over the new-crop prices, that old-crop vs. new-crop 'inverse' has collapsed a bit this week, with Sep. and Dec. contracts gaining ground.

However, because of tight U.S. stocks, the early harvested corn would be considered old-crop in the marketing world, analysts say. 

The farmer that is planting corn early and can harvest an early maturing crop, he/she is shooting for that old-crop marketing slot. The market is picking up on that thinking we will get a lot of bushels in August, reacting negatively. This is also sending signals to the market that September, normally an old-crop contract, should be considered as new-crop this year.    

With the old-crop contracts trying to attract farmer-selling and the new-crop prices starting to make only slight gains on talk of China demand, the farmer may be sitting tight and weighing marketing options, says Alan Brugler, President of Brugler Marketing and Management LLC, in Omaha, Nebraska.

"I think the big issue for the producer is that he/she has seen higher prices than what is being offered right now. He/she has money in the pocket and doesn't have a crop either planted or out of the ground yet. So, there is not a lot of motivation to sell," Brugler says.

If the Fourth of July arrives, the crop looks good but the prices haven't rallied, farmers will most likely get a little more aggressive on sales, he says.

More Storage

With an additional 600 million bushels of storage capacity built in the U.S. last year, farmers may have a tendency to use it to wait out the end-users. 

"On the other hand, most producers are familiar with the philosophy of 'a short crop has a long tail', referring to one or two years of lower prices after a big price spike. After last year's all-time high, the mentality is that the market could be lower at harvest in 2012.

"I would suspect there would be a little more storing of crops this year, because the farmer will be thinking I got $6 for this crop last year and they are only giving me $5, $4.50 or whatever it is. But, the smarter marketers are going to compensate for that," Brugler says.

Export Sales Pace

Along with how fast the U.S. crops get planted, the market is eyeing the speed of exports. As of this week, the USDA reported that corn sales stand nearly 200 million bushels behind a year ago. When corn export inspections and shipments are combined, that figure only shows the U.S. export pace off 70 million bushels vs. a year ago through nearly two-thirds of the marketing year. 

"Shipments are actually in-line with the USDA's forecast of a 135 million bushel decline this year. We'll need to see the commitments of sales pick up or you might start to think the USDA is too high on their yearly estimate," Brugler says.

On Friday, the CME Group corn market couldn't capitalize on talks of China possibly buying U.S. corn. Instead, the market focused on a lower South American soybean production estimate out of Argentina, Scott Shellady ICAP Energy and CME Group floor trader says.

"I know a lot farmers are 'long' corn and want that market to go higher. But, corn just doesn't look good, technically, right now. And it looks like corn will go down before it goes up," Shellady says.

Price Calls

For nearby May corn futures, resistance is seen at $6.50-$6.58, while support is at $6.13, Brugler says. For Dec. corn futures, resistance is seen at $5.58-$5.62 and support at $5.20-$5.23. 

November soybean price resistance is pegged at $14.08 and support at 12.99.