Markets Now: Wheat Profitable, Good Corn And Soy Carry Opportunity

Farming’s contribution to GDP has retreated two consecutive years after reaching an all-time high of $189.9 billion in 213.

Set aside time for marketing and gaining control of your positions in the 2018 crop, according to analysts on this week’s Markets Now. While harvest might monopolize much of your time, it’s still essential to lock in profit.

“[As] producers work very hard to get harvest into the bin there’s that feeling of relaxation and this is a danger point for two reasons,” said Brian Basting with Advanced Trading to U.S. Farm Report host Tyne Morgan. “No. 1 is if these bushels universally are as large as what the USDA is saying, we have a tremendous crop but that means also with South American [potentially] rebounding next year there is some downside risk in the market, even from these levels.”

 “The second component is there’s excellent carry in the market now to next summer, 25 cents plus out to July corn and about 50 cents on July beans,” Basting continued.

There are ways to lock in the carry while still leaving upside in the market. He says to get a price floor and manage the carry in the market.

Wheat will have excellent opportunities this winter.

“Wheat has been building position for about four years,” said Kevin Duling with KD Investors. “We should have a very good window this winter to sell 18’, put a great floor under 19’ and possibly 20’ with either the put options or hedge to arrive.”

When spring rolls around, wheat should be in a very profitable situation that farmers can take advantage of for three years, Duling added. “It’s going to start in the cash market, the cash market spin on the futures are going to be behind and when the futures finally catch up that’s your time to hedge when cash starts looking toppy that’s your 18’ crop window.”

He thinks that time could be December to February but hedging will be later that that to put the floor underneath 19’ and 20’ crops.

Comments