US - With the turmoil revolving around Brexit, it is hard to stay focused on a market plan. This downturn in markets will be overdone then bounce back and the world will continue to move forward, writes Allan Bentley, Genesus US Sales.
Beings corn plays such an important part to a hog producers input cost, I thought I would spend a little time talking about corn prices. I believe the corn market has the highs in the rearview mirror.
At last check the corn market lost about 60 cents a bushel in 5 days, or about 12%. That erased a 6 week rise in prices. I do not follow technical charts as well as many, but they have to look pretty bad after last week’s losses.
No two weather forecasters can agree on the weather going forward, so by betting on the weather you will win half the time and lose half the time.
Putting events like Brexit and the weather aside we must assume we will have trend line yields. Not a rocket science statement there, but my point is we should not have a market plan based solely off weather.
Wheat harvest is in full swing and will hold any rallies in corn to a minimum. Summer cash hogs are strong, but I believe these prices might be approaching the highs for the year. Unlike the crash in corn, cash hog prices should hold until late August. October and December hogs are about $3.00 off the highs.
If we can manage to get December up around $67, I would consider that an early Christmas present and hedge that 4th quarter. Relying on the cash market in the summer is a fine marketing program, however relying on the cash market in the 4th quarter is like relying on the weather man.
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