Which of These Market Movers Will Prevail?

July 22, 2016 09:00 AM

According to Dan O’Bryan, risk management specialist with Top Third Ag Marketing, there’s never just one factor that moves grain markets.

“We don’t predict the markets,” he told attendees of the 2016 Farm Journal Corn College in Heyworth, Ill. “When someone says they’re certain the market’s going one way or the other, grab your wallet.”

At the same time, “we like to keep an eye on things,” O’Bryan adds. Currently, he says Top Third is monitoring multiple factors that could create bull or bear markets, including:

Bearish Factors

  • Weather (good)
  • Large world carryouts
  • South American competition
  • Workld economies and strength of U.S. dollar

Bullish Factors

  • Weather (bad)
  • Funds are short wheat and getting short corn
  • World soy oil demand
  • Chinese demand (South America is low on exportable beans)

Try to look at these “market movers” as objectively as possible, O’Bryan adds. Otherwise, farmers could worry and freeze instead of marketing their grain when it makes sense to do so.

“As the markets go higher or lower, so do your emotions,” he says.

“Do not sell calls to pay for puts,” O’Bryan offers as a final caution. “It works until it doesn’t, and when it doesn’t work, it can be a real headache.”

Interested in attending a future Farm Journal College event? Get the full listing of additional offerings at http://bit.ly/corncollege.


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