Sell all remaining old crop corn, basis contracts, long futures, call options, DP corn. Sell it. Sell all of it.
Contract all the 2022 corn your nerves can stand, up to 100%, if your merchandiser will let you roll to the next crop year. Sell on a December HTA because there is no carry in this market. If carry comes in to this market, you can roll from December into a deferred month and capture the carry this fall.
Do not price beans. Do buy corn puts yet, even if you already sold new crop corn.
For the reasons why now, read on:
We had expected the high on corn and beans to be on May 9th. A month ago, The Tech Guy said he looked for a high this week.
On Monday, December corn was more than 50 cents off the contract high. We were confident it would come back, but we most certainly did not expect it to come back to the highs this week.
But it did and it made a new high by one cent last evening and has not challenged that high since last evening. The Upper Midwest is not going to be planting corn any time soon, but there is a lot of corn getting planted. I (Roger) went west about 30 miles last evening and I was surprised how much corn was planted in West Central Ohio. I did some calling this morning and there is a lot more corn planted than I expected.
The high was made last year on May 7th.
We had been looking for a high on May 9th for months. Last night, when the new high was made on December corn, it was May 12th. Not much difference between May 9th and May 12th.
Don’t be wasting time thinking about it. I remind you four days ago, December corn was 50 cents less than it is now. This is last trading day of the week after a big run up in two days. Profit taking is a high probability later today.
There are enough potential weather problems, we do not recommend buying puts just yet, even if you have already price your corn. This corn market will not drop several dollars until July.
Use that smart phone and call now to price corn all 2021 and 2022 corn.
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