Near-term it wouldn't surprise me to see a little bounce to the upside. Producers who are still holding old-crop bushels, in my opinion, should continue to hold. I am thinking now that the funds have rolled out of the front-end, and as we approach first-notice-day (Feb. 28) in the March contract, we could get a little pop as "quality" supplies remain extremely tight and virtually non-existent in many areas. I honestly do not believe the USDA's current on-farm storage estimates (I think they are too high).
I simply cannot find any areas of the country that are "easily" sourcing quality corn or soy bushels. I just don't believe the bushels are out there! Unfortunately that is NOT what the big players are trading right now. Remember, it is not about being "right," its about making money and managing your risk. You can argue the weather, the drought, the lack of quality bushels, the USDA numbers, etc., but your ultimate goal is to try and figure out what headlines and data the big players are trading. Maybe once we turn the page there will be some talk about the lack of quality supplies, but right now there is more focus on lack of demand and somewhat improving moisture levels. Even though as a nation we are drier than we were last year at this time, the trade doesn't seem to care.
From my perspective the pros are desperately trying to skate to where they believe the "puck" is going to be, NOT to where the puck is currently! If you want to compete in today's markets you have to take a similar approach, know the rules, and understand how the game is being played! From a producer's perspective I am still not comfortable re-owning any previous sales. Spec's who are willing to take the risk may want to consider playing a front-end type bounce. I still have very little confidence in the back-end.
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