As Brian Splitt of Allendale looks for patterns and insights into today’s market, he finds himself turning back time, to 2009-2010.
“That was the last year we had a record yield for corn,” Splitt said on U.S. Farm Report Saturday, speaking with host Tyne Morgan and fellow panelist Sue Martin. “We’ve seen a lot of the price points are very similar as far as highs and lows. (We’ve also seen that) the timing of those highs and lows are very similar, as we’re continuing on that pattern as we speak.”
That pattern leads Splitt—like many others so far this spring—to urge farmers holding old-crop corn to let that grain go if the market improves.
“Any rally that we get short time, if there is old crop to be moved, it should be taken advantage of,” Splitt said. “In 2010, we did have a little base of support at $3.55 in the July corn contract—and we did make some lows recently at ($3.5575).”
Luckily, corn prices didn’t say there—although they surely did fluctuate. “We were able to work our way up to about $3.85 that year, but ultimately, we succumbed to some new lows, down around $3.25 before making our final low on the June quarterly report that year,” Splitt recalled.
Watch and listen to the discussion here:
He expects something similar this year. “I think—bottom line—you’re going to see that same type of pric action for corn and soybeans,” Splitt said. “This is an opportunity on a bounce, (with) probably some new lows to come before the end of the quarter.”
When might that bounce occur? Martin, who is the president of Ag and Investment Services in Webster City, Iowa, said she expects some improvement this summer.
“I’m looking at the grain markets, and in years that have fundamentals stacked up similar to this one, I think that what we are looking at is a market that is going to catch a rally here, June to July,” she said. “It’s that rally that of course coincides with farmers wanting to let go of a bunch of cash corn. If they can catch still a good basis level, lock it in, and take basis contracts, then when we get this rally that we’re expecting, they’ll be able to consummate their trades or cash sales. Maybe they can do a little better than just outright winging it.”