MarketEdge PM Comments
May 02, 2023
(Cody Forde)
Good afternoon,
Corn and soybean both head lower as planting progress continues and world prices weaken. Most asset classes moved lower as more economic uncertainty arises. Crude oil led the charge with a eye popping move lower of over 5%. Which pushed corn to fresh year to date lows on new crop. Last trade for December corn was 518^6 down 6^4. New crop soybeans traded lower with a last trade of 1266^0 down 9^0 cents.
What should we be doing if we are undersold for new crop? Risk management suggests making sure we have crop inputs covered. We have a lot of unknows but that doesn't always transpire in higher prices. We could have some shallow rallies and possibly a move higher later into the summer if we have a crop problem. The speculator is holding a small, short position in corn as noted in Friday's Commitment of Traders Report. The seasonality of the market suggests a low in late May with a counter seasonal rally for some unforeseen reason, typically weather.
- Upside bullish bias 5.43 basis the December 2023 futures
- Downside bearish bias a close below 5.00 basis the December 2023 futures
- Upside bullish bias 13.00 basis the November 2023 futures
- Downside bearish bias a close below 12.00 basis the November 2023 futures