Grain market prices are not where farmers want them to be right now. Are there any signs of optimism? Kevin McNew with Grain Hedge has his eyes on a few factors at play.
“There are a few positive things to gravitate towards,” he says. “[Look at] USDA’s soy crush numbers for January. We saw those come in at the high side of expectations.”
Expected volume was 159.8 million bushels, and actual inched higher at 160.4 million bushels.
“That’s not a big difference from expectations, but it’s nonetheless on the high side,” McNew says.
Although that won’t necessarily churn the market higher, it will help in establishing a floor, he says.
Corn may have a factor in its favor as well – a lack of current export competitiveness with Argentina, McNew says. A price gap between higher-priced U.S. corn and lower-priced Argentinian corn throughout the winter has narrowed significantly in February and March, he says.
“I’m not sure that will persist once they get past their harvest in the next month, but at least in the time being, it is certainly positive to maybe set a floor on this corn market if we can start to see some new export business pick up,” he says.
Meanwhile, at the 2016 Commodity Classic, AgDay interviews with grain organizations revealed that building global demand will be a top priority this year. Find out what they had to say in the video below.
Are you bullish or bearish about where grain prices will head next? Share your thoughts in the comments below.