Why Did We Recommend Pricing Corn
but Not Soybeans
December 2022 corn made its contract high of $7.66¼ on May 16th. On May 13th, we recommended pricing 100% of remaining old crop corn and 100% of expected 2022 production or all your nerves could stand in the $7.50 area. December corn traded above $7.50 a total of 9 days, 4 days in April and 5 in May.
The recommendation to sell the corn went against the seasonal trend and, to an extent, the technical outlook, although the technical picture was weakening. The new crop US corn exports were nothing to write home about and the world’s second largest corn exporter had just started harvesting a very large corn crop. Big oil and consumer groups were pressuring the Biden administration to do away with the ethanol mandate to reduce food costs. We thought farmers planted more corn acres than the market thought.
The seasonal trend, fundamentals and an especially strong technical outlook supported our decision to not price the beans on June 9th, when November soybeans made the contract high at $15.84¾.