Now is not the time for wheat producers to be selling their crop, says Brian Roach, Roach Ag Marketing. Instead, they should be building a small long position.
“You have weather around the world—Australia, Russia, you have problems in Brazil with heavy rains,” Roach tells Tyne Morgan on the “AgDay” Agribusiness Update. “Our attitude is that you would want to expect that there’s going to be more volatility and that we’ll get a couple more rallies. Most of the selling in wheat probably ought to wait for later on this year.”
The wheat market has seen three “pretty good” rallies, but now more information is needed.
“It’s not time to sell,” Roach reiterates. “We’re cutting wheat. We’ve got the hard red wheat mostly behind us right now. If you just look at it from a seasonality standpoint, making a lot of sales at harvest is rarely the right thing to do.”
For eastern Corn Belt producers whose crops have quality issues because of persistent rain, Roach advises getting a plan in place.
“If you have a serious vomitoxin problem, you’re probably going to have to sell it where there’s a buyer,” he says. “Then look at defending that sale on paper. Because that problem’s not going to go away unless you have a lot of blending capacity and the ability to lower those numbers to something that’s going to pass the quality test.”
Click the play button below to watch the complete interview with Roach.