Where are some upside targets for CZ 15?

  • Posted on: March 25, 2015

New Crop Corn is worth looking at as we head into next Tuesday’a report. You can see the congestion we’ve had here near $4.17 and $4.20…. This level of congestion has come into play over the past 20 weeks. Certainly over the past 3 months, its been a significant level. Why? In my opinion, its due to the fact that $4.17 is the 38% retrace ment of 2014’s 1.45 melt down. The high? May 9th…. $5.09… That price was the peak for 2014 Marketing year for CZ15. Its the highest price we’ve seen in CZ15 for 18 months. Fast forward to the recent contract low at 3.64 1/4. 4.18 is the 38% RT 4.34 is the 50% RT 4.50 is the 62% RT When folks are wondering whey we these levels matter, all I can say is, They do. For better or worse these Fibonacci numbers always come into play. 99% of folks won’t admit they pay any attention to them. They are being less than truthful, in my opinion. Consider this,, “Profitability” for most US corn producers is near $4.50. We might very well get a spike up there. I’d have my orders waiting to sell at $4.45 through 4.48 so I don’t miss that sale trying to get that print. Sell it two cents lower and lie down at the coffee shop about the other 2 cents. Consider this, if the delta continues to be wet, and those farmers switch to beans,, you probably have more pressure on beans. More acres on beans as well. The average guess is 88.5 Million acres of corn plantings and 87.5 million acres of beans. If we get less corn acres planted and we get a weather issue, that’s a story line that lets you see a good spike higher in CZ prices. CZ is the new crop. Its the crop that has yet to be planted. If we get a hard break here, it might be a good place to buy cheap calls to try and capitalize on a Summer market before it ever gets started. See Chart Below