The USDA is back to work and the market is beginning to react to market news instead of assumptions. By next Monday’s Crop Progress report, we would assume soybean harvest should be almost complete while corn should be over 50% done.
So where is harvest pressure and why are we not seeing any? It is rumored many producers have better than anticipated yields. Corn seems to be in a trading range and this morning soybeans broke through resistance. You could say, without the facts, that being the Crop Production report, the market was unable to move lower.
What does this mean for the producer? For corn it seems $4.32 basis the December contract could be the low and the market could be range bound. Increased demand, a weather event to reduce supply, or a lower U.S. dollar needs to occur for the market to move higher.
Seasonally this is the time period when the bin doors shut and the market tends to move higher, but we may not see that this year. Many producers have opted to store corn unpriced and the end-users, knowing this, are not bidding higher prices in the deferred months, instead it is a sit and wait mode.
The outlook for 2014 could be a sideways to lead month slowly rising to high $4 but the deferred 2015 sliding down and producers more than ever need to have a market plan using all their resources to make the right marketing decisions because next fall we could see a 3 in front of the price instead of a 4 at harvest. Now is when producers should be reviewing their decisions made this year and what they would do differently for next year.
Next year will be difficult at best! With large yields there will be sufficient supply so demand or weather is needed for these prices to go back above $5.50. Bob has come out with his 2014 marketing plan to give our clients his projections for next year along with recommendations as to how to increase profit margins for next year. If anyone is interested in receiving a copy, call our office (1-800-832-1488).
We will be updating our blog twice a week. One update will be dedicated to market outlook and trend and the other will be dedicated to education. Knowledge and understanding is essential if producers are going use all the resources available to them to price their production in the future. If you have questions, ask them and we will try to answer them each week on our blog, Email questions to [email protected] or [email protected].
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