Play Turner’s Take Ag Marketing Podcast Episode 273

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The grain markets are on fire. Corn and soybean oil closed limit up today (4/22) and wheat was limit up mid session but couldn’t quite stay at those levels by the close.  We go over why the CBOT is trading this way, what to look for, and how to trade it this spring and summer. Make sure you take a listen to this week’s Turner’s Take Podcast!

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Limit Up – Corn

Corn was limit up today lead by a very strong cash market.  End users need coverage between now and harvest and the grain is just not readily available. They have to bid up prices to get the last remaining bushels out of farmer storage.

There is concern about production declines in Brazil (2nd crop corn).  Any exports that Brazil can not fill usually comes back the US.  That could be 5mm mt of corn or 200mm bushels the US might not have to export. We also heard rumors of China looking to buy US corn but we could not verify that today.

Planting is not off to a good start and based on the long term weather reports this spring/summer could be warmer and drier than normal. We have tight old crop stocks, not enough US acres, and if need a record yield just to have adequate stocks next year!!!

No one wants to get short, even farmers who eventually have to sell their grain.  Inflation trade and money moving into the Ag space is a reality.  Seasonally this is a time of year to be long grain (especially when stocks are tight)

Add in all of that and we get a big rally.  Keep in mind May FND is a week away and if the supply is not out there then commercial end users will be buying for delivery. I’m sure there are margin calls and forced liquidation too. Moral of the story is we are in for a wild spring and summer.  Big breaks, big rallies, no place for the faint of heart.

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Trade Ideas – FILLED

FILLED  – OLD CROP – Bought the July Corn $6.50 calls for 14 cents on 4/20 and sold the $7.