Grain markets typically quiet themselves, as we approach the Christmas holiday. However, we saw “quite a bit of interesting action” this week.
Matt Bennett, founding partner of Ag Market, quickly admits: “The bean market struggled.” However, matters turned around on Thursday, and soybean futures ended the week on a positive note.
“The bean market went up four times and touched on 12-dollars before we were finally able to breakthrough it on Thursday. Then on the overnight market, Thursday night into Friday, we took off to the races and closed the overnight session with double-digit gains on soybeans,” Bennett says.
Grain markets were fueled by a weakening U.S. dollar, which neared three-year lows. Bennett says, “It’ll be interesting to see how we move forward here.”
“We’re below 90 on the index. If you get below 88, there’s a lot of free air below us, as far as the charts are concerned. The cheaper dollar is certainly going to make our products competitive on the world market, which has been a concern of folks,” Bennett says.
Chinese buying also shed a positive light on grain markets. The Weekly Export Sales report indicated sales of 1.9 million metric tons of corn and roughly one million tons of soybeans to China. Bennett tells producers to “stay grounded, find your breakeven, and look at this from a profit margin standpoint.”
“Don’t let the bullish fever pull you out of your game. Whenever I look at November ’21 beans at $10.75, I know a lot of folks are saying, ‘I don’t want to sell those because old crop is above 12-dollars. What if we can get those above?’ I understand that. At the same time, when’s the last time you sold $10.75 beans for next year’s crop in December?”
