Grain Market Viewpoint

How to Play the Current Market: Your Corn and Beans in both Old Crop, New Crop

I'm cuttin' to the facts today

We have a couple reports coming up and I wanted to throw my hat in the ring and call a few shots. Here is the breakdown.
 
Old-crop Corn
There has been some noted farmer selling the past few days as prices continue to trade above $7.00. In fact technicians are now thinking the next upside hurdle at around $7.36 in the MAY13 contract can be obtained.
 
New-crop Corn 
Technicians seem to be thinking a move towards $5 is not an IF but a WHEN. Moisture levels in several key U.S. growing regions are improving, and thoughts of a potentially record crop are escalating in its wake. Remember the USDA thinks we could see a 14.5-billion-bushel crop and in turn is predicting a $4.80/bu. new-crop price average.
 
New-crop Soybeans
Whatever soybeans don't get out of South America now will be exported out at a later date. Unfortunately this could push deep into traditional U.S. export business if the weather cooperates. Third and fourth quarter U.S. soybean prices may be weighted down by an unusually inordinate amount of Brazilian beans still floating around in the marketplace and ultimately competing directly with U.S. exporters. Moral of the story: If new-crop beans are able to keep their momentum I would suggest pulling the trigger on another round just north of $13/bu.
 
How to Play it
As for today I suspect the corn and soy markets, especially in the nearby contracts, will try add a little more premium as they head into Friday's USDA report. If all goes as planned on Friday, I think we could see even further gains in old-crop as the trade prepares for the March 28 stocks report. Those holding old-crop bushels may want to reward the recent rallies with a few small sales, but I would continue to hold the majority of your ramming bushels back waiting for even further gains ahead. Bull-spreading, at least for the time being, continues to look like the smartest play for specs. Spec players may also want to take a closer look at April and or June Live Cattle; I think there is some upside potential in the sessions ahead.
 
For the rest of the story
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Kevin Van Trump

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...
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