Keep an eye on corn prices
There is no doubt we will see plenty of corn acres this spring but there are chances for market rallies, according to Dan Zwicker with Zwicker Consulting.
“If you assume something closer to normal, we are going to have anywhere between 94 and 96 million acres of corn planted then you start multiplying that by trend-line yield and we are probably going to have too much grain,” Zwicker told The Central Illinois Farm Network last week.
In the near term, the corn market could see more strength during March then planting season hits in April and it could be difficult to keep corn prices up during that time.
“We’ll just have to kind of take it one week at a time,” added Zwicker.
Some of Zwicker’s long term cycles do give us a decent shot at stronger prices toward the end of the growing season, which would be in the August-October time frame. We still have to get rid of the old crop corn which is in farmer hands.
“The hedge pressure from that has to be absorbed into the market place.”
Until the inventory moves into stronger hands where the commercials begin to own it, it will probably be difficult to get a sustainable rally unless something totally unexpected happens.
Zwicker has similar thoughts on soybeans and believes both corn and beans will go up and down together.
“I think beans are in a position here also to try and rally during the month of March then once we get into the April time frame, we could see some softness,” he said.
There is a 30 percent chance the spring low was put in place last week and those percentages will continue to increase as we approach April 15. If we get through this month’s USDA report without any curve balls, then the rally Zwicker is looking for could start a bit sooner.