I just dropped a new podcast. Click here for Turner’s Take Podcast | June 27th, 2017. We go in-depth on why I think corn is range bound for the rest of 2017, beans are likely to eventually trade sub $9.00, and now that Spring Wheat is testing $7.00 we could see it go to $7.50 or $8.00.
CORN | My estimates have corn acres at 89mm planted and 82mm harvested. I also think the yields are about 167 bpa based on the lower G/E ratings in the Crop Progress reports. If correct then new crop stocks are sub 2.00 billion, probably around 1.8 to 1.9 billion, and that means corn is most likely range bound between $3.50 and $4.00 until we know more about the next South American crop.
I don’t see corn trading below $3.50 basis dec futures unless we have a 172 yield and I don’t see corn trading over $4.20 unless we are sub 160 bpa on the national yield. I continue to like the CH8/CU7 bear spread as long as stocks are adequate. I would expect the spread to make a run at a 30 cent carry by the end of August. Stayed tuned with Turner’s Take Market Alert for updates on that spread.
For farmers I really like selling covered calls on corn in storage during rallies. I think that can be an effective strategy to pick up nickels and dimes each month which you can add to your final sales price. Call me 312-706-7610 for details or follow along with Turner’s Take Ag Marketing.
SPRING WHEAT | Now that Sept Spring Wheat is close to our $7.00 target, I think we could see $7.50 or $8.00. The fact remains we are going to have ending stocks around 100mm bushels. The food services industry need high protein wheat and they will have to aggressively secure it for their products. The market will have to price ratio by reducing export demand. I think part of this could play out in the March/May spread and we will remain bull spread. Stay tuned to Turner’s Take Market Alert for updates to the March/May Spring Wheat spread. In years of shortage this spread can widen out by 20 or 30 cents and the margin is only $650 per spread!
March/May Spring Wheat Spread
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