Fall harvest progresses at an ?unprecedented? pace, as warm, dry weather persists across the Midwest. However, other parts of the world remain troubled by such dry conditions.
?Dryness, which is affecting other parts of the world, is starting to get the market’s attention,? says Jim McCormick, branch manager of Ag Market. South America, in particular, struggles with planting next year’s soybean crop.
?Argentina is not getting a lot of rain. Brazil, in general, is dry for this time of year,” McCormick says. “Mato Grosso, their biggest bean growing region, (has) only planted about one-point-five-percent of their beans compared to a year ago, where they planted five-percent. The five-year average is just shy of 10-percent.”
“The delay in planting is bullish for United States producers,” adds McCormick. Other bullish factors influencing soybean futures this week include trade estimates for the October World Agricultural Supply and Demand Estimates (WASDE) report. McCormick believes Friday’s report should be exciting.
?The average trade guess is for the corn crop to get smaller by a few tenths of a bushel. The same thing (goes) for beans as well, as (we) lose acres out of Iow from that storm. We?re looking for carryout in the beans to drop by almost 100 million and corn carryout to drop by 380 million bushels,? McCormick says.
McCormick says, “Producers need to be cautious, as we might have set ourselves up for ‘buy the rumor, sell the fact.'” He recommends locking in profits, while protecting against risk.
“If you have some $10.50 beans, don?t be afraid to lock in some of these profits and then use some kind of option strategy to re-own the grain. The same thing for corn. As we get closer to four-dollar corn, I?m going to encourage people to continue to move this corn out of their hands,” McCormick says. “The risk is still high. We still have a pandemic. Also, China bought a lot of this grain, (but) they have not taken delivery of it.”
