Corn producers who are still holding old-crop bushels are starting to run out of time and seem to be getting a bit more nervous. Yesterday's USDA report was somewhat uneventful, but with the Chinese backpedaling more in regards to U.S. imports, a late inning rally in old-crop is certainly starting to feel much less likely. Personally, I've been sold-out for months, but I know many producers who are still holding old-crop supplies and are willing to take the gamble.
It worked well for those who held their soybeans, as I sold-out just above $13.70, and some of those who elected to hold out were able to get over $15.00. I am just not so sure the same type of outcome will hold true in the corn market. I'm pulling for you...but it just feels like the corn market is ready to turn the page and focus on new-crop potential.
Unfortunately for the bulls, there is not a lot of exciting news in the new-crop headlines either. Keep in mind the USDA is now saying the "corp condition" ratings the past few weeks (to start 2014) are some of the best they have seen in several years for the 18-major producing states. Moral of the storY: There continues to be more talk of a potential record U.S. corn crop in excess of 14.0 billion bushels. In light of the big potential the USDA has lowered their projected 14/15 estimated price range for US corn to between $3.85 and $4.55 per bushel.
I have been asked several times as of late by producers, "What should I do if I am way behind on both old and new-crop sales?" This is a tough question because I personally believe everyone has to define and develop their own personal marketing plan. Even more important than "designing" the plan, I believe is being able to "execute" the plan. Everything looks easy on paper, but are you honestly following your predefined roadmap?
Unfortunately this is where most drop the ball. For me, I prefer to make a good portion of my sales early (if profits are on the table) to take some of the emotion out of the game in the later innings. Simply stated, by reducing the "emotion" I am able to more easily "execute." I'm not trying to avoid the question, I am just pointing out that I design my marketing plan to avoid the proverbial belly-aches and to avoid getting myself in a situation like this. If I had drifted off course and found myself with a large dose of old-crop still in storage and almost no new-crop priced heading into pollination, I would be asking myself a zillion questions about cash-flow, liquidity needs, potential storage complications if prices don't rebound before I harvest new-crop, etc...
Bottom-line: Dumping the old-crop bushels and holding off on any new-crop sales obviously makes the most sense. It creates cash-flow, frees up available storage and buys lots of additional time. Also with new-crop prices well below the spring revenue insurance guarantee of $4.62 per bushel, I see no real need to start making new-crop sales at this stage.