1/6/2021

Another round of contract highs overnight and an 8am sale announcement of 4 million bushel of corn to an unknown destination but the biggest highlight was corn trading above the magical $5 level. The current market sentiment is extremely bullish and it’s important not to become complacent and assume everyday will be higher. Instead of attempting to guess the market top, evaluate your situation and use some target pricing to protect these price levels. Trade is blowing off the fact we are over-bought and it's time to take some precaution. We have an opportunity to lock in good cash prices on old and new crop at the same time and higher corn prices are sure to slow export and ethanol demand (basis). There is still some upside potential to the bean market which will help support corn but that potential still needs to be realized as potential. Brazil's rainy season has arrived on schedule and we need to assume that they will harvest a good enough soy crop and we will likely see a lot of Brazilian acres double cropped into soybeans. The only bullish spin to weather in Brazil is if excess moisture results in a delay in harvest or planting of double crop soy acres. These big trading ranges should narrow going into the report release on Tuesday.