Potential exists for higher, lower prices
If we reach new lows in the corn, wheat and even the soybean market, one area market analyst believes we could see soybeans a dollar lower and corn 50 cents lower.
“I think this year more than any other year, you have to look at using something that will keep you flexible,” explains Merrill Crowley of Crowley Commodities in Watseka. “Puts bring to mind a good idea to be flexible because you can buy them and put a floor into the marketplace.”
If the market turns around and goes up, you could sell cash at a much higher price with this marketing tool. Another option available to growers includes covering short positions by selling corn or soybeans on the futures and using a call position on top. Crowley says the idea is to keep costs low and if these markets move lower, pressure will be on the old crop more than the new.
Crowley sees better prices over the long term. This could result from a weather factor and inflation coming together but there is a really good possibility of seeing the markets go higher.
“I’m still looking for $4.00 corn cash and beans up somewhere around $10.50 or $11.00.”
Going back in history, Crowley cannot think of a year when we didn’t see some sort of a price bounce from a weather problem.
Crowley Commodities of Watseka can be reached at 815-432-2220.