Corn Strategist - Sept. 27, 2017
2016 crop: Even though strength wasn’t sustained, the late week rally was further evidence the downside had become exhausted. We’d abandon any long puts or collar options to protect old crop on basis contracts. We may price a portion of these inventories on basis contracts if December rallies over $3.70.
2017 CROP: At the least, last Friday’s positive performance in corn futures tilted the odds heavily in favor of the trend turning sideways. With the bulk of harvest ahead, we wouldn’t expect to see sustained strength the next few weeks. With soybeans still high relative to corn, there’s reason to consider pricing soybeans for cash flow, while storing corn. Even then, remember to sell the carry when sales are made this winter/spring. HTA contracts may be the best marketing tool to use.
FUNDAMENTALS: Early yield reports have been good, but still suggest this crop is smaller than last year. Demand may remain somewhat tepid through harvest, but will pick up as buyers become comfortable the harvest low has been seen.