Posted by: usset001 | October 13, 2009

Higher corn and soybean prices offer a second chance to the “undercontracted”

Cash corn prices bottomed out in September at about $2.75 per bushel in Southern Minnesota. Today, you can find bids as high as $3.60 with most elevators closer to $3.40 per bushel (the highest bids, I suspect, come from elevators caught short in a late harvest).

Cash soybean prices were as low as $8.40 per bushel less than two weeks ago. Today you can sell soybeans for $9.50-9.60 per bushel. Even spring wheat prices are 50 cents higher than mid-September lows.

The latest rally gives new life to the “undercontracted.”

Though it seems counterintuitive, harvest-time rallies in grain prices are not rare. Many analysts are trying to explain the rally with talk of a late harvest, good demand, less than stellar early harvest reports, etc. In my opinion, it goes back to activity and trends in outside markets. The dollar is tanking, the stock market is strong, gold is strong and the energy complex is strong.

In the end, the reason why is not important. When a plate of cookies is set in front of you, do you stop to ask “Why?” or do you grab as many as you can?

For the undercontracted grain producer, this harvest rally is a chance to get a few cookies.

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