South American production issues or a weather situation here in the United States could lead to a decent bump in corn and soybean prices, according to one market analyst.
Merrill Crowley, of Crowley Commodities in Watseka, says if Brazil ends up with a drought, countries would come to the U.S. for beans.
“If that were to happen again this year, I think you could say the total ending stocks for beans are going to go down to a tighter situation.”
The South American crop is currently off to a good start which Crowley considers “concerning” for now. He believes beans will probably get larger yet on the production side of things. If any type of production or weather issue arises, Crowley won’t rule out $4 corn and $10 soybeans. This would all depend on the severity of the problem.
“If we don’t get these problems, then it’s going to be very difficult to rally these markets,” Crowley admits.
Everyone seems to be talking about ending stocks and how they dwindle with soybeans. We have 30 million bushels less in our soybean carryout than we had last year.
“That kind of scares me when I look at only being 30 million bushels less than our carryout and having a price that’s at $9.45 versus last year’s $8.86,” Crowley said.