Market prices have held strong within the past week.
A market analyst shares what all the excitement is about.
He also shares his forecast on future market direction.
Analysts watched grain markets push higher last week. Greg McBride, commodities broker with Allendale, says the World Agricultural Supply and Demand Estimates (WASDE) report was the turning point.
“We dropped 3 million acres (of corn) and have yield down 10 bushels an acre. That gives us a little bit of cushion to think maybe the USDA could lower those numbers even more on the July or August report. (There is) obviously weather concerns across the Midwest. There’s a lot of beans still out there. As of last Monday’s report, we were at 60-percent planted for beans, so there’s a growing concern that we’re going to miss out on two- to five- million acres of beans from what they told us at the end of March.”
McBride says weather will continue to play a role in the markets, as they try to gain a better understanding of acres lost due to heavy rainfall amounts.
“We’re coming up to the late planting date for insurance. Most of the Midwest, at this point, has to decide whether or not they’re going to prevent plant on beans. We’re past the point of no return on corn,” McBride said.
The active role of weather in the market calls for steady to higher prices.
“It should hold for now,” McBride said. “The concern I have is maybe a little technical correction. Then we still have the wildcard of trade, whether it’s trade issues with China, India or Mexico. For right now, there’s definitely strong push in the grains to see higher prices. We have the funds continuing to jump in on the long side of things and we have funds continuing to jump in on the long side of things. It does look good for prices at least in the short-term and maybe even out to August or September.”
McBride encourages producers to take advantage of these prices, especially when it comes to old crop corn.
“You need to look at your old crop, what you have on hand. These prices are fantastic for old crop corn. This is the best you’ve had in a few years for being able to make old crop sales. Make some old crop sales. If you want to own corn, reown it on the board. For new crop, lightly get some sales done,” McBride said.