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Teucrium Corn ETF Message Board

  • valueguy65 valueguy65 Jul 11, 2014 10:46 AM Flag

    Buying on the way down

    Corn prices are now well below the estimated $4.50+ break-even price for farmers which is a key metric (see June 5, 2014 Corn & Soybean Digest); which means less will be planted going forward if prices stay low; which leads to higher prices. The current low price assumes that mother nature will fully cooperate, but how often does that actually happen? If you look at price action following past bear markets there's usually a healthy rebound. At this price point, it looks to me like the least risky mid to long term trade would be to go long. Maybe I'm wrong, but I'm going to be greedy when others are fearful...

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    • marilynandbill69@sbcglobal.net marilynandbill69 Jul 12, 2014 9:44 AM Flag

      That's my assumption as well. Logic tells me that less corn will be planted next season if farmers lose money on their crop this season. However, I read that the break-even is a little lower than your estimate, closer to $4.10. Still, I agree that CORN is a good accumulation now and if it goes lower.

    • bbmak@pacbell.net bbmak Jul 11, 2014 12:56 PM Flag

      Isnt Govt will subsidy the farmers if they have a loss? I think in order for corn to go up, we need to wait til the weather change.

      Sentiment: Hold

      • 1 Reply to bbmak
      • It's my understanding that subsidies for corn don't start kicking in until prices are in the high $3s to low $4s depending on the program picked so it might not be profitable to plant corn in the near future if price is below break-even for a farmer (those more knowledgeable than me correct me if I'm wrong). Weather is definitely a bigger issue right now, but the potential profitability of producing corn has an impact as well in the longer run.

 
CORN
20.96-0.16(-0.76%)May 5 4:00 PMEDT