Well, winter is past the half way point and Spring is a mere 6 weeks away, what should we be looking at for unsold corn and beans in the bin? How long until load limits are posted? How much corn do we want to potentially move this summer if we haven’t moved anything yet? On the bright side we are talking about numbers on both corn and beans that are better than harvest time. On the other side we are still looking at numbers that are below trigger points for most producers. In these flatter, big carryout years it is important to keep your attention focused on a couple things:
1. The trading range
2. Selling the carries
Let’s start by taking a look at where we have been trading on corn. March corn from December 1st has traded from $3.4175 on the low-end to $3.71 on the high side. Essentially a 30 cent trading range from harvest forward is what we have been seeing. As I am writing this today we are trading just a few cents off the top side of this range. With a 2.3 bln carryout still looming over the market trying to hit the upper side of trading ranges seems to make sense. Below is a look at the day chart for March corn.
Beans have been a wild ride over the past month as South American weather continues to be a factor. The trading range on beans although wide continues to hold as we have set fairly significant support and resistance levels since the beginning of December with $10.80H17 on the high and $9.9275H17 on the low. This equates to a 90 cent trading range which today we are slightly above the middle @$10.42H17. The carryout estimates from the last USDA report in January showed a significant decrease in carryout to 420 mln bushels. Although this number moved a favorable direction we are still on the cusp of a what looks to be a good Brazil and Argentina bean harvest. Below is a look at the day chart for March beans.
The last comment I wanted to make about was about the cash returns producers are able to lock in for June delivery versus what we are paying today. Below is a look at the current market versus June delivery. (both looking at Grebner’s bids)
As you can see the decision to forward sell binned bushels still makes sense even after figuring carrying costs. If one looks at cash carries on the bid sheet, places target offers and works with a trusted local Grain marketing specialist at Wheat Growers there is a good return on unsold corn and beans in the bin.