Stay Flexible! That’s the advice from Advance Trading Economist, Brian Basting.
He told Chip Flory on Wednesday’s AgriTalk After the Bell that grain stocks are certainly not tight, but they are projected to be “tight enough” at the end of the 2018-19 marketing year that any production problem in the U.S. in the 2018 marketing year will bring volatility to those markets.
“And especially the corn market,” said Basting. “It doesn’t take more than a 5% cut from trendline yields and this corn market could go back to the highs we saw in the summers of 2015 and 2016.”
But Basting also warned, “You can’t count on that happening. So building a price floor in corn and soybean marketings right now makes sense… just be sure to maintain flexibility in you plan so you can take advantage of price bounce on a weather scare.”
On wheat, Basting talked about hefty global stocks, but he also cautioned that when China’s wheat stocks are removed from the scenario, the world ends up with a much tighter supply of “tradeable wheat.”
He says, “It’s hard to be bullish wheat right now, but if the dry conditions in southern Russia expand and they don’t catch the much-needed rains in Australia, those could be important developments for the wheat market to watch.”