BUILDING COMMUNITIES ONE BUSHEL AT A TIME

The Jan crop report really didn’t contain much that one could construe as bullish. The focus now will switch to South American weather. That doesn’t look very threatening right now and all indications are for a huge first crop. I suspect we watch funds start building a short position here and we are in for a water torture, drip drip drip lower winter. Basis has weakened in the east as US corn unloads so racking up storage on stored grain a pretty unlikely winner IMO

New Crop corn above $220 given these fundamentals makes it hard to think we shouldn’t be aggressive sellers of this. If the US gets a decent planting season we will be putting a 3 handle back on corn futures and if ON gets a decent growing season there is no way basis stays this strong. If we can get back to 5t corn you are turning down $1100 /ac right now. I’m not suggesting you need to sell it all by any means but if you do half of it here and you miss out on  $40/t, you will lose opportunity but still average $240. If you are wrong the other way by $40/t you get $180 and you lose money. Feels like another era of agriculture where hitting singles can win ball games. Be careful out there!