WATSEKA – Since Thanksgiving had the bears, the bulls should get Christmas as the old saying goes.
Corn and soybean prices have rallied this week surrounding rumblings of a U.S.-Chinese trade agreement. China said during a Friday news conference that major progress was made on the first phase of the trade agreement. If this deal has any teeth to it, we may have reached the bottom for prices.
Also, basis remains tight which is good news. There is some debate whether that basis is due to a lack of corn or tight farmer selling.
“As usual with some situation like this, it’s probably a little bit of both,” Merrill Crowley of Midwest Market Solutions told The Central Illinois Farm Network this week.
Crowley feels crop size needs to decrease somewhat, especially on corn. When there is farmer selling, that basis widens. News of a trade agreement with Mexico and Canada early in the week helped support prices. If the agreement is officially voted on and approved, it would likely mean a positive move for the markets.
Exports have been poor and until this changes, it is difficult to see anything happening other than weather problems. Looking ahead to 2020, many will be closely monitoring the Jan. 10 USDA crop production report to see if it is positive.
“That would go a long ways in helping things,” acknowledged Crowley.
Crowley doesn’t see USDA making big changes to acreage and yield, although that could slowly change as we move through the year. Other big reports include the March stocks and planting information and June stocks report.
On a positive note, minimum winter rallies in the past suggest a rally of 30 cents for corn and 56 cents for beans.
“Average rallies up into the spring usually are about 70 cents for corn and $1.76 for beans, however we’ve got to see a low from which to rally from.”
Any type of buying or selling will move this market quite a bit, according to Crowley.
To reach Midwest Market Solutions in Watseka, call 815-432-2220.