One More Soybean Rally Into the New Year

December 17, 2016 05:00 AM

The soybean market is the shining star of commodities this year. Even as production climbs higher, demand remains strong, which is benefiting soybean prices.  

“We're in a camp of selling beans on the next rally on into January,” said Brian Roach, of Roach Ag Marketing. “If you're interested in re-owning those beans, you re-own them on into the July contract this year.”

He says soybeans typically outperform on the demand side, which is a scenario he doesn’t see changing this year. So, Roach thinks producers should get a fair amount of inventory moved before February 1.

Corn is another commodity to watch. Roach suggests only moving corn bushels for cash flow purposes, as he doesn’t see the possibility of more promising corn prices surfacing until much later in 2017. However, Joe Vaclavik of Standard Grain thinks those unsold corn bushels will weigh on farmers, and banking on a major weather hiccup in the U.S. to move prices isn’t a wise strategy in 2017.

“The biggest problem I see in the Corn Belt now is that there is too much unpriced corn in the bin with no plan,” he said. “If we do have some kind of year-end rally, whether it’s just  money flow or whether it’s a South American event, I would be prepared to lighten the load a little bit on some of these old crop bushels.”

He says holding on to corn and waiting for a U.S. weather event is a big gamble, so he thinks growers should hedge their bets into the New Year.  

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