We will be closely watching the July corn contract, especially the low posted last Friday of $5.72. If a new month brings in money flow on the buy side, it will make that low even more important to watch. Crop progress will also be closely watched, as emergence and later condition ratings will be monitored as well. Some have reported that replanting will be necessary as some crops were trying to emerge last week when widespread frost was reported. Some replant is normal every year, and the weather forecast going forward is more favorable, but anything that signals a lower acre number and/or lower yield portential may spark some buying. With the recent price drop, we would also hope to see some increased export business, and perhaps some end user pricing as well. Caution is advised however, as there are still concerns about the downside:

While watching all the above for pricing signals, we want to make sure to watch the spreads as well. For those who hedged new crop in the September contract when the inverse was substantial, the market actually traded at a carry briefly Friday, and closed at a penny inverse. We want to roll those hedges to December at some point, capturing the gain in the spread. Recent history says even money to 10 cents carry is possible, so watch closely or call for some ideas on where to put orders in. If you have old crop left, watch the July lows made last Friday in both corn and beans, and check basis often as sometimes good bids will appear during planting season. Supplies in the eastern belt are more plentiful than in the west, but ethanol plants are still the best bet so far east of the Mississippi, with rail bids suffering. For new crop, we are not recommending any sales here, as history tells us the chance of getting back to the inurance price is very good. We are not sure that will happen again, but with the size of the sell off, and the funds now short in corn and wheat, it would not take much to get some sort of a bounce. Make sure you know where your profit goal price is, and let us know so we can watch it for you while you're busy with planting and let you know if we get close. Sometimes opportunities come and go very quickly! New crop beans seem to be well supported around 12.50, and with the balance sheet very tight, we would also be patient for a while to see if we can't get back to the 13.50 area. If this price is attractive to you, let us know to either put in some orders or at least call you.

May 12^th will be the next USDA Supply/Demand Report, with updates on South American crops and demand projections. US production will likely not be changed, but the carry out numbers for both the US and the world will be closely watched. No one knows how much grain will be produced in the Ukraine this year, and the "safe corridor" to move grain out of the Ukraine will expire May 18. Both of these dates have the potential to be major market movers, so stay in touch for the latest developments!