Analysts expect spring rally for stored grain
If you’re wondering whether you should sell or store your corn and soybeans, analysts on the weekly ag news TV program “U.S. Farm Report” have an answer: Keep filling the bins and wait for a spring rally.
“I don’t see us going back to [harvest lows] based on the data we’re seeing,” said Brian Roach of Roach Ag, speaking on the Oct. 9 TV program, which is part of Farm Journal Media. “We’re soon going to trade on South America, and I think growers are going to want to put the crops away like they’re planning [and] keep ownership until spring because another year of good weather in the U.S. is unlikely.”
The situation leads Roach to believe crop prices could be on the rise—just not right now.
Compared with 2014, when corn and soybean prices moved up sharply in October, “fundamentals are different,” he said. “The pipeline is fuller today than a year ago. But I still see a 50¢ to 75¢ move in corn into spring because end users don’t have a lot bought and producers don’t have as much sold as they did a year ago.”
Roach expects to see gains in soybean prices, too, although perhaps not as high as farmers might want.
“You have to temper the topside of your price expectations. This past year, we traded above $10 futures just a couple times,” he said. “I think producers can look for that kind of price level sometime between now and springtime when they absolutely have to move those crops, but you have to be ready to sell it and manage your basis.”
Kevin Duling of KD Investors also sees the potential for a rally in the months ahead. “I believe the risk is more on the end user side of it than the grower,” he said on “U.S. Farm Report.” “If that’s the case, you need to be patient. I think [growers] are going to see better opportunities. ”
Roach also sees farmers moving into the driver’s seat when it comes to crop prices. “This is a time of year when producers want to put the crop away and shut the bin doors. Don’t be afraid to wait for basis to make a pretty good appreciation because it will pay for storage,” he advised. “I think you move into the front part of the year and begin to work off your crops Jan. 1 and not much before.”