Pay attention to market influencers
NORMAL – Plenty of outside factors continue to impact crop prices. It is dry out west and we continue to hear of Russia possibly limiting some of their exports.
“That would tighten-up the wheat available,” Curt Kimmel of Bates Commodities told The Central Illinois Farm Network on Tuesday afternoon.
There may be plenty of wheat around the world but availability could be an issue as countries talk food security and want to hold onto the inventories they have. With dryness in the wheat belt, we could see a switch away from wheat acres so growers can take advantage of higher corn and soybean values.
In this dynamic market, most everyone is bullish even though most were bearish as recently as last summer.
“What we’ll have to do is continue to move higher here to kind of ration the supplies we have,” said Kimmel.
When looking at sales and shipments, the demand side is not slowing down. Israel came in and bought 100,000 tons of U.S. corn while Japan bought 128,000 tons of U.S. corn and even China purchased 132,000 tons of soybeans.
As we approach the South American harvest, there are rumblings of a truck strike on Feb. 1.
“We saw Argentina go through that process too and slow down some exports there for a while which helped our markets.”
All eyes continue to be on weather in the Southern Hemisphere and how freely grain stocks move out of those countries.
Kimmel notes this is probably one of the most hated market rallies he has ever seen as everyone tends to look toward the past and regret selling too soon before the market went up.
“It is human nature and one of those situations where if you buy something, you find it cheaper somewhere else,” Kimmel explained.
With these frustrating times we are in, a good way to help eliminate some of the human emotion and take advantage of these prices is buying a put option and putting a floor under you. This allows a grower to hang on to cash grain.
