Corn and soybean futures trended upward today. A market analyst shares what is causing the uptrend and what to expect moving forward.
Brian Grossman, market strategist for Zaner Group, reports corn and soybean futures today trended upward. He says the uptrend in futures prices follows another hot, dry weekend in Argentina.
“Argentina, accounting for half of the world’s soy meal exports on a global scale, is something to be concerned about,” Grossman said. “The forecast again this morning is sticking to a hot and dry outlook. Some rain showers are moving through, but they’re impacting areas that are too wet. It’s a bit of a double-edged sword with rain landing where they don’t need it.”
The forecast indicates temperatures will reach into the 100’s this week in Argentina. The dry spell, lasting almost a month, threatens the countries crop conditions and depletes subsoil moisture. Grossman says dry weather in Argentina offers United States growers price advantages.
“It gives us a nice little spike up,” Grossman said. “November soybeans, for the new crop, is pushing that 10.10 area and old crop beans sitting a 9.90 on the March contract are pretty favorable prices compared to what we were looking at not that long ago. We’re also seeing spillover support following into the corn market, up 2 on the day, but flirting with the 3.60 level in March and even December contract trading over the 3.90 could be an opportunity for a lot of guys who struggle with sales through the 2017 marketing year.”
Grossman advises U.S. growers to pay close attention to this weather market. He also encourages producers to take advantage of new crop bids.
“While we’re in the weather market, we do have a little bit of time to work with the old crop grain in storage, but the new crop opportunities are something that should be taken advantage of,” Grossman said. “We’re not far from breakeven for a lot of producers. They should be closely looking at if they could make a profit here.”