Analysts are trying to decide whether or not we have reached highs for corn and soybeans The answer to this question is critical as a rocky trade climate takes its toll on the futures market almost every day. Two market analysts share their thoughts, up next.
Jim McCormick, senior advisor for Allendale, shares his thoughts first. McCormick says he fears corn and soybeans have posted highs for 2018.
?If we went into a full blown trade war with everybody, we start hitting tariffs on people and they reply back. That will be negative and that scares the living daylight out of me,? McCormick said.
However, McCormick believes there is another opportunity for a pushback, if the United States can avoid entering a trade war with China and nations hit with steel and aluminum tariffs.
?With the forecast we have, I think we probably have one more good shot of a pushback up and take out these spring highs. The balance sheets are very tight, the world carryout on the corn is dropping dramatically, stocks used on the world corn are going to be back to levels we haven?t seen since the 70s. We need a decent crop in the United States. I think the odds are very high. We have one more good pushback up into the summertime. But, the producers out there need to be ready to sell into that,? McCormick said.
Brian Grossman, market strategist with Zaner Group, chimes in by saying it is uncommon for grains to post a seasonal high in May. Grossman believes there is ?enough fundamental reasons to remain conservatively bullish on corn once the trade rhetoric dies down.
?At this point, we have a lot of white noise giving us the headwinds – trade rhetoric and such. We really need to pay attention to how much June and July weather we still have infront of us. The weather outlooks are showing we?re going to be relatively hot. Then add in weather problems that China is having. Their major corn growing areas on the dry side. Brazil (is) also very dry. The number two exporter is looking for a significant reduction. Safras & Mercado is at a 79 million metric tonnes compared to USDA?s 87 and the 97 they produced last year,? Grossman said.
