Farm Progress

Can bulls keep the weather premium in the corn market?

Kevin Van Trump

April 22, 2016

2 Min Read

Corn traders continue trying to decipher upcoming South American and U.S. weather forecasts. The bulls say the upcoming rounds of wet weather here at home might delay planting in some key production areas and should therefore be considered bullish price. On the other hand the bears are saying the weather is nearly perfect for the seed that has recently been planted and the overall pace of planting shouldn't be negatively impacted.

Most inside the trade are looking for the USDA on Monday to show double-digit gains in regard to the pace of U.S. planting. Several sources believe we could jump from 14% planted last week to between 25% and 30% by the end of this weekend, which would obviously be well ahead of our traditional pace. Remember, the trade likes to see the U.S. farmer on pace to have about 80% planted by mid-May. As of right now that doesn't look to be any type of concern. Therefore it's tough to imagine the trade adding any type of "weather premium" for planting delays until we start to actually fall behind schedule.

In Brazil, there seems to be more talk of cooler temps and more wide-spread rains being added to the forecast. I suspect this now takes some pressure and concern away from their second-crop production.

I felt fortunate, at least temporarily, to have made another fresh new-crop cash sale yesterday up at $4.08 per bushel vs. the DEC16 contract. I still remain nervous in regard to longer-term price risk so I like the thought of keeping my hedges in place. Continue to keep your eye on the rains being forecast here in the U.S. and South America; I suspect they will direct nearby fundamental price direction. The next few sessions will be important on the charts, many technicians will be paying extremely close attention!

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About the Author(s)

Kevin Van Trump

Founder, Farmdirection.com

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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