Corn and soybean markets are tough, something Richard Brock of Brock & Associates have been grappling with. On Market Rally Radio Thursday, he discussed the five things farmers need to keep in mind when it comes to these two crops.
1. The U.S. has record or near-record corn and soybean supplies.
“It’s not impossible, but nearly impossible to get a bull market going in the next nine months with the kind of supplies we have,” said Brock. “When I say a bull market, I mean a dollar up in corn and $5 up in beans. I don’t see that as a remote possibility.”
2. Farmers are going to be “tight holders” of corn and soybeans until the end of 2017.
“The heavy movement came when they emptied their bins to move the old crop in August—that’s what put the bottom in this market.”
3. Farmers didn’t want to sell old crop corn and put it under DP contracts.
“The grain elevator now owns the corn even though the farmer hasn’t priced it, so the farmer’s going to lose on that one way or the other. I’ve never understood in 40 years why people do that.”
4. There will be more talk of drought conditions from eastern Iowa to Illinois.
“We are unseasonably low on water in those areas right now.”
5. Traffic (or lack thereof) on the rivers.
“The Illinois [River] is impacted by heavy barge traffic because of huge coal exports. The Mississippi River has some areas that are only 7 feet deep right now that’s got barges backed up everywhere.”
Hear his thoughts on the transportation issues on the rivers and what he expects to happen in Brazil on Market Rally above.