Corn bulls are disappointed that the massive break in the U.S. dollar this week has amounted to absolutely ZERO gain in corn prices. A friend of mine in the business wrote me yesterday and said, "Well, if the high dollar was one of the main reasons we couldn't rally soybeans/corn before, then I am surprised we aren't getting more of an upside response from a dollar that is now at levels seen last October when corn was 20¢ higher and soybeans were 50¢ higher! Remember what they always say about markets that can't rally on what's believed to be positive news..." 

It obviously doesn't help when you have many inside the trade starting to raise their Argentine and Brazilian corn estimates. While at the same time, growth in U.S. export and ethanol demand is highly suspect. Keep in mind, exports are running about 20-25% behind last year's pace and your window of opportunity over South America will soon start to be more heavily scrutinized.

There's a similar story brewing in ethanol. If crude oil price aren't able to rebound and gasoline remains 30-40¢ cheaper than ethanol, it's tough to envision any type of growth in the ethanol space. In fact without a boost in exports, which appears to be a nearby long-shot, it will be extremely tough for ethanol production to hold at it's current levels.

Net-net, as a producer, the "fundamentals" are extremely hard to swallow right now. In fact while I've been muddling through bearish headline after bearish headline, I have to constantly remind myself that hope is not a viable marketing strategy. Hence why I decided to reduce some additional new-crop risk this week.

I generally don't have this much priced/hedged prior to planting (40% of my estimated new-crop production), but I'm just nervous about the waves of bearish headlines I see out on the horizon. Yes we still have an entire U.S. weather season ahead of us, which I hope provides us with a better opportunity. But this is certainly not the type of environment where you want to be chasing high-heat or swinging for the fences.

I remain nervous about the outside macro space, slowing global growth and the fallout in crude oil. The "weather bull" inside us all continues give hope, but have to realistically ask yourself, "How much am I willing to bet on that unknown?"  

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