Beans lead the way
Soybeans have been leading the way in the recent price run-up.
The New Year price rally still held together Wednesday before easing. If USDA comes out with a lower number for carryover bushels, we are going to likely see a nervous market around the world.
“We still have quite a bit of concern about world supply and it leads back to Argentine weather, South American weather and Brazil weather but really where is the crop that we had here in Illinois and the Midwest from last year and the year before,” Roy Plote said this week. He is with PCI, the L&M Commodities branch office.
Plote has heard many farmers are well sold out of soybeans and funds are coming back at the market. There are record long positions – not just in soybeans but corn too.
“There is talk of $14, $15 and even $16 soybeans at some point in time if concerns continue over weather and production,” Plote adds.
Roughly 7 million more soybean acres are needed to help fill the balance sheet in the world. Wednesday was about the 16th day of a higher corn market, something pretty much unheard of in Plote’s opinion.
“That’s just unbelievable.”
No one knows where this is all heading as uncertainty continues with China and what they may do to Hong Kong or Taiwan. Also, Russia or North Korea could have things up their sleeves. With a new president in charge of the United States, other regimes may want to test him.