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Weather We Will or Not

Published on Monday, July 15, 2019

As mentioned in last week's post WASDE update, the USDA made no material changes to the balance sheet for corn.  It will be another month until the much anticipated August WASDE will be released with the revision to the June Acreage report.  Until then, no formal changes will be made to acreage or yield numbers.  However, as mentioned last week, there is one thing that can still alter the mindset of traders regarding the latter.  That element is weather.

Last Monday, the National Oceanic and Atmpospheric Administration (NOAA) issued their daily run of the 6-10 weather forecast (shown below).

Growing heat intensity was offset by above normal precipitation.  That changed by Thursday.  The Thursday release of that same model is shown below.

Today's run is show below.

In the eyes of many farmers and those in the market, the corn crop is likely to experience stress this week.  That perception drove markets higher in the final days last week into the start of Sunday night's trade.  However, technical (chart) resistance found its way back into the trade once the top of the channel (blue lines) was met.  That led to profit taking in Monday's session.  

In the absence of updated yield information, weather and charts will both determine our course and decide "weather" or not we can make new highs or if this 2019 opportunity is over.  In the process, volatility will remain high.  Managing this volatility with sales and option strategies will be key to moving through the chaos and capturing the opportunities as they develop.  Contact us to sort through strategies best suited to your operation. 

Best Regards,

Mike North

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