Posted by: usset001 | January 3, 2009

More new year opportunities

moneycornMy last post spoke to pricing opportunities for old crop grain held in storage. But the rally in prices over the past five weeks has not been limited to old crop values – a rising market also shines a spotlight on the opportunity to price new crop grain.

The Dec’09 corn contract closed Friday at $4.56 per bushel. That’s $1.05 cents off the December 5 low . I understand that $4.56 new crop corn is not close to the $6 level last seen in early September, but that ship has sailed and we need to re-adjust our thinking to the realities of a new year and market.

Nov’09 soybeans closed above the $10 mark on Friday, $2 above the December 5 close and back to levels last seen in early October. The story is similar for new crop spring wheat futures. The Sep’09 contract is trading about $6.75, about $1 off its lows of early December.

Five weeks of higher prices is good news but, as we like to say in the fine print, “past performance is not a guarantee of future results.” We need to sit up and pay attention to new crop pricing opportunities.


Responses

  1. Protein discounts on HRS (-22 / 5th in most in the northern RRV) are obscene; given the generally lower protein content of the ’08 crop. No wonder people are holding off sales.


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