Commodity markets ended Wednesday’s trading session sharply lower. Jim McCormick, branch manager of AgMarket.Net, cites selling prompted by yesterday’s World Agricultural Supply and Demand Estimates (WASDE) report.
“We’re taking a bit of the bullish froth off the market,” McCormick says. “We didnt’ get the bullish report people were hoping for. The trade raised (corn) exports by 50 million bushels. The trade was looking for a 150 to 200 million bushel increase in the exports due to China buying. We’re getting a little bit of the traditional ‘buy the rumor, sell the fact.'”
The U.S. Department of Agriculture also confirmed a cancellation of 132,000 bushels for delivery to unknown destinations, which increases pressure. McCormick recommends producers reassess marketing plans at this time.
“Don’t panic. Take this as a reset,” McCormick says. “Your goal is to produce a crop and sell it profitability. It’s not always the price; it’s the profit, as we like to say at AgMarket.Net. The profit margins are there. Look at your balance sheets.”
AgMarket.Net professionals believe we have yet to see highs for the year. McCormick explains the reasoning behind the team’s thinking.
“Bean carryout was dropped to 120 million bushels, a shade below the average trade guess. That’s a 2.6 percent stocks to use. Historically when they’re that tight, we see 15- to 18-dollar beans. Same thing for corn. The carryout is about 1.5 billion bushels. Our group and a lot of people in the industry think that will continue to wind down, so that will give us opportunity,” McCormick says.
