With volatility, the opportunity to sell rallies and buy price breaks increases.
End users of corn should be keenly aware that world supplies are on the decline, and that cheap and readily available corn could already be behind the market.
Production challenges exist every year, and weather is still the dominant factor affecting supply and price direction.
The perception, suddenly, is that world supplies could be tighter and prices are now trending upward.
Call options are fixed-risk marketing tools used by both producers and end users of commodities.
There are always a lot of moving parts in the bean complex
From a historical perspective, there is a general seasonal pattern to row crop commodities.
The saying that low prices cure low prices does have merit.
The last week of January has had some fireworks, as the corn, wheat, and bean markets have all come to life with prices moving to their highest levels in months. It can be argued that wheat is the leader. We saw wheat futures prices rally mid-summer due to concern over lack of snow cover and continued dry weather in major U.S. winter wheat growing regions. More importantly, the technical picture indicates a significant buildup of short positions in recent months by managed money. Managed money goes short futures when they believe prices are headed lower.
For many, planting a high-input crop such as corn may not fit the profile lenders want to see.