Corn Futures

[kslseed]

Hello Charlie, what is happening with US corn futures. All grains are stabel or go up, but corn goes into the tank. Why and for how long?

Joerg Klempnauer

[charliep]

I have to admit the same frustration/question about corn. The newsletters I read/people whose information I follow highlight the fact that market expections are that yields are better than expected and production higher. Sparks/other market consultants are upping Sept. 1/03 US corn carryover to close to 1 bln bu vs USDA forecasts of 730 mln bu.

Combine this with normal heavier US farmer selling off the combine to pay bills, Eastern Europe/Former Soviet Union aggressively market feed wheat plus slack world feed grain demand and prices have headed south.

As a prudent manager of feed cost risk for a livestock producer, I would use this opportunity to buy some CBT corn calls for this winter. Similarly, anyone who has sold feed barley and wants to re-enter the market could consider the stategy of owning some corn calls - timing is a little less critical given I think the most potential for fireworks will come later this winter (weather season for S. American soybeans/US winter wheat condition) and next spring (weather at planting time.

[charliep]

Never got any feedback on these strategies. What are others thoughts?