Is there a possibility corn prices could rebound in 2016? Bryan Doherty a market analyst with Stewart-Peterson Inc. says that it’s not out of the question. He cautions that while price isn’t going to improve for the next 30-90 days it could increase in the next 12 months.
To better understand how the market might recover, let’s recap how we got where we are.
Doherty says the higher U.S. dollar, good weather, uncertainty with China earlier in the year and problems in Europe are a few of the headwinds driving downward pressure on price.
“It’s been one thing after another this market has been battling,” he told “AgDay” host Clinton Griffiths on Thursday. “At some point these things are going to turn friendly for price. We saw a hint of that when corn prices rallied 90 cents in one month earlier this year.”
According to Doherty in the New Year markets will focus on the value of corn.
“If value doesn’t give producers reason to want to produce we might lose acreage again,” he says.
Doherty predicts the most likely scenario is upward pressure on prices in the winter months. Selling into that rally is what farmers are going to want to do, but he advises to exercise balance because there are a lot of things that could push price through 2016.
“You’ve got to manage your cash flow,” he admits, “but if you’re going to sell into the market, look at ways retain ownership. Next year could be a totally different picture for corn prices.”
Watch the AgriBusiness segment on AgDay’s below: