Corn and soybeans closed lower again Thursday.
John Heinberg, Total Farm Marketing, says corn and soybeans make new lows and hit prices not seen for four years.
Funds have been adding to their short position but Heinberg says farmers have also been selling preparing for the upcoming harvest and they are selling instead of rolling basis fixed contracts.
However, he says there will be quite a bit of selling in August as the September contracts go into delivery.
So how ugly could these markets get?
He thinks September corn is vulnerable with producers needing to move old crop bushels. Plu, now that December corn has broke $4, it could go down as low as $3.50 before finding new demand.
“You know that could point to a $3.40 target zone if the selling were to really kick in,” he says.
For November soybeans Heinberg thinks the market will take out the $10 level, with $9.50 as the next psychological stop.
The pressure is a combination of both supply and demand according to Heinberg.
Heinberg says prices will need to go lower to stimulate that demand but its hard to know how much lower the market needs to go before that demand does kick in.
With the strong crop conditions the market is also trading at or above the current yield projections from USDA of 181 bushels per acre for corn and 52 bpa for soybeans.
