Starting to hear talk of how things were in 1993! Saturated soil and rains through early July wiped out most of Iowa’s crops. We’re not there yet, and hope to never get there again. Rock Island, Illinois is just an inch below the record flood level set in 1993! In 1993 Iowa was only 3% planted with corn on May 9 compared with the 5 year average prior to 1993 of 27%. So, as Chip Diller/Kevin Bacon said in Animal House: All is Well! We are staying calm but the stage is set for a possible sharp, wicked rally if the sun doesn’t come out soon. We have been advocating buying some calls spreads to benefit from this situation.
Market make up is much different than it was back then. Funds are humongous and more acreage is managed by fewer hands. Regardless, Mother Nature still rules and it’s a day by day affair. Keep an eye on the skies.
Less corn, durum, oat and spring wheat acreage but sub soil surplus might lessen the anxiety as what acres get planted might enjoy a greater chance of excellent yields. More bean acreage and a better chance of great yields might keep beans as the runt of the litter pricewise. Regardless, Mother Nature has made us jumpy for the rest of the growing season. Small speculators might participate in the fear and anxiety limiting exposure and buying calls. Spreads are wide yet, there’s no reason to bull spread unless we’re near 80% and above full carry for old crop/new crop and then it might be worth a thought to own the spread. We’re a long way off on corn and beans and the vomitoxin factor muddies the waters on wheat
Happy May Day Comrades! Pledge to the revolution of the reallocation of capital. Things in Venezuela are coming to a head, we hope, and pray for resolution. Yet, these situations have a life of their own and like the weather, things can change quickly. Typically, it’s the speculative community which runs for cover and exits positions in times of uncertainty and strife. Farmers might not entertain selling below the cost of production. Reversal of Fortunes! It still feels like there’s a lack of concern and reporting of what’s happening in France and other central and eastern European countries.
The information contained on this site is the opinion of the writer and obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in current market prices.
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