June 25, 2018
Corn prices are steady to slightly higher this morning. The market has recently rallied about +20 cents off its nearby lows. The old-crop JUL18 contract posted a low last week of $3.38^6 and the new-crop DEC18 contract posted a low of $3.60 per bushel.
The question now is can and how long will it take to for price to recover? Weather here in the U.S. has been extremely cooperative to start the season. Many producers who have been complaining about extreme heat and dry conditions got a little break this past week, but it looks like the forecast is heating back up. If I had to narrow my selections, I would have to say the greatest risk for corn stress continues to be in several parts of Missouri and in areas of Iowa and Illinois where it borders Missouri. I would also have to chose a few select areas in Kansas and southern Nebraska. The extended forecast will bring possible drier concerns for producer in the eastern portion of the U.S. corn belt.
The bulls are also pointing to continued talk of political concerns and perhaps logistical problems for both Argentine and Brazilian exports. On the flip side, bears continue to point to negative trade headlines, especially those involving NAFTA nations and the Chinese. From a technical perspective, the DEC18 contract will be battling fairly stiff resistance on the charts this week between $3.80 and $3.90 per bushel.
Without some positive headlines surrounding trade or a more negative shift in U.S. weather, I suspect it will be tough for the bulls to find enough momentum nearby to push much beyond the $3.90 level. Obviously, longer-term there's potential for much higher prices, but it's going to take a significant shift in sentiment.
From my perspective, weather and Washington remain the two driving forces and star attractions. I'm not looking for much change in this week's USDA weekly crop-condition report. Staying patient as both a producer and a spec.
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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