Grain Market Update: June 16
Where do we go from here? That is the main question being asked by farmers, grain traders, speculators, hedge fund managers, and many, many more people involved in agriculture.
Recently, we’ve seen both corn and beans set back from the most recent highs. Both old crop and new crop corn are off about 14 to 15 cents. July beans are down about 75, and Nov beans are off 67 from their highs. I think the real question is if this is related to weather or funds liquidating their longs.
As discussed previously, we originally rallied because the funds reversed course from short to long. First, in the soy complex, and then later in corn. A big part of this was because of a weakening dollar. Now, the dollar is stronger, crude oil is down a little from it’s high, gold is up and the Fed is leaving interest rates alone, again.
In the past couple of weeks, we’ve also added some weather premium to the grain markets. I think that concern sticks around for the next month or so. Most traders will be glued to every weather forecast update through at least corn pollination, and beyond.
Finally, on June 30, we will see the USDA’s latest information on planted acres. Will they show a big decrease in corn acres and a big increase in soybean acres? Or, will they make a slight adjustment to corn, and a significant increase to bean acres? They will also release the June 1 stocks information. Both pieces of information will be scrutinized closely, and have the potential to make a major change in price.
So, if you are concerned about the financial impact that the next 2-4 weeks will have on your operation, I would encourage you to speak with your local Ag Partners grain buyer. We have some programs that work well to protect your bottom line.
-Tom Guinan, Grain Origination Manager