August 2, 2018
Corn prices are up a bit this morning, with the DEC18 contract back above $3.80. Prices eased a bit yesterday on renewed worries about trade, a slightly improved and more cooperative U.S. weather forecast, and a pullback in the macro space, i.e. oil prices falling under a little nearby pressure. I continue to hear private traders using corn crop product estimates with a yield averaging between 177 and 180 bushels per acre. Bulls continue to talk about strong U.S. demand for corn. U.S. exports remain robust and demand for U.S. ethanol also remains strong.
There's also a massive livestock herd that is providing strong demand for corn. From a technical perspective, the DEC18 contract has run into stiff nearby resistance up around $3.90. From there the trade sees additional hurdles at the $4.00 and $4.20 range. As a producer, this is not a period of time when we want to stick our head in the ground and "hope" for higher prices. I've been saying the past few weeks that we must pivot and switch our attention from being so heavily price oriented to paying more attention to total estimated revenue per acre based on our most updated yield estimates on the farm.
For some, the combination of increased yields, lower prices on the board and steady to stronger basis is actually more of a winner than a few weeks back. As a spec, I continue to see the market as somewhat rangebound, from $3.70 to $4.10 sounds very realistic. A win with NAFTA and some weather worries could certainly get us back north of $4.00. A continued delay in NAFTA and cooperative weather, we probably drift sideways to lower. I still say "demand" alone has a tough time doing all of the lifting.
About the Author(s)
Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead.
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