Tariffs, trade cast shadow on prices

November 21, 2018

 

NORMAL – Market analysts speaking at this week’s Farm Assets Conference in Normal are hopeful for a trade resolution between the U.S. and China but aren’t holding their breath.

 

Soybean prices could have a big initial reaction to any type of agreement with China but corn could see more of a long-term impact.

 

“I think we could see corn follow beans higher if that happens,” said Bill Mayer of Strategic Farm Marketing.

 

Mayer believes an excess supply of grain limits the upside potential on prices and as we move into the new year, we could see corn move into the pipeline faster than we need it.

 

Wayne Nelson of L and M Commodities is waiting for a little “pop” in prices and feels something good will happen in the world which could lead to a market bounce. He does caution against not wanting to market anything in these volatile times.

 

“We are going into some rough waters,” Nelson said. “We want to have our life jackets on and survive this.”

 

Most of the panelists agree that this next year is going to be very rough for farmers. Pete Manhart of Bates Commodities recommends booking some 2019 corn above $4.00 if possible and having a target price to sell at. Manhart admits much of the up and down moves are based on political statements and headlines, but producers need to look at selling when numbers move higher.

 

“Have prices in there waiting for (the market) to get there.”

 

University of Illinois ag economist Todd Hubbs cautions that the pricing window is getting extremely narrow. His advice is for growers to make a marketing plan for 2019 if they don’t have one already. Hubbs will closely monitor the March acreage report because a big jump in corn acres would likely hurt prices. He believes $9.00 beans and $4.00 corn are good sales levels.

 

“I don’t care how you sell it…sell it,” Hubbs said.

 

Merrill Crowley with Midwest Market Solutions feels it could take something like a weather scare to push prices back up. If we are going to see some buying going into the market toward the end of the month, Crowley thinks growers should have a marketing plan in place.

 

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