The NBA playoffs start Saturday. Who will be the 2025 NBA champion? Top betting choices include a young Oklahoma City Thunder team, the Boston Celtics going back-to-back, a well-rounded Cleveland Cavalier team, and the LA Lakers with Luka.
Recent history tells us the NBA champion will be a 1-3 seed. Last time a 1-3 seeded team didn’t win the championship was 1995 when the sixth-seeded Houston Rockets beat the Orlando Magic. Teams listed above, as you may have guessed, are all 1-3 seeds.
No algorithm for $5 corn
If the NBA champion is always a 1-3 seed, is there a simple method for predicting whether December corn futures will trade at $5 this year? The answer is no. Grain markets have too many highly variable fundamental factors that influence price, supply and demand. Weather is a given each year. Add government policy to this year’s list of unpredictable variables.
Even if a highly likely prediction isn’t possible, looking at basic supply and demand in the U.S. and how prices are influenced is a good thought exercise. The chart below shows U.S. stocks-to-use from a year previous (and the amount of time corn traded above $5 in each year’s December new crop contract).
The above chart makes it appear that when U.S. ending stocks the year previous are under 10%, corn trades at $5 December futures. But this chart is only part of the story. In those years when stocks-to-use was below 10%, weather influence, a Russia/Ukraine war and world supply/demand factors affected price.
This could be the difference between an easy lay-up and a strategic play: Tight supplies do lead to explosive short-lived rallies. Though a lot of corn acres are expected this year, paths exist at this early point in the growing season that can lead to a tight supply remaining tight. Consider those tight 2024 stocks when marketing this early.
To discuss further (and perhaps even talk a little basketball), please give me a call at 701-401-9600. To contact any of the hedging strategists at AgMarket.Net, call 844-4AG-MRKT.
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