Corn and wheat prices are probably near their low point, experts tell the U.S. Farm Report Market Roundtable.
"These bear markets are very mature, and probably you’ll creep around the bottom for maybe a little bit of time, but I think the downside is limited on both of those markets," says Mike Florez, Florez Trading.
Kevin Duling of KD Investors agrees.
"The issue is grains usually don’t make V-bottoms on the chart, they usually have to trough out and make some sort of a saucer on the charts," Duling notes. "Perhaps we sit here a month, perhaps a month and a half, we’ll see. We have the Sept. 30 stocks report, which could have some surprises. I’m expecting some surprises in the wheat market on the stocks. I think the feed usage was higher if USDA will give us that true number."
From here on out, Florez says, producers can probably view USDA as a friend. At this point, the agency wants to keep the market stabilized, and negative news about the corn market in particular isn’t likely.
"We’ve had high-priced corn for a couple of years now, and we used an awful lot of it," he says. "Now we’re at $4.50. You’re going to use more of it, so I think this is just going to spur demand across the world."
Meanwhile, orders out of South America will present opportunities for U.S. wheat producers.
"We’re looking at Brazil having to continue importing wheat from the U.S. and with soft red already at 71% of export projections and the hard red in the 60s, that to me is a good sign," Duling says. "We’re going to keep the demand rolling. … Everybody had empty bins going into this, so everybody had their stocks depleted. Now we’re going to see more demand than we expected."
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