Grain and oilseed prices took a tumble the second half of this week, despite less than ideal forecasts for planting to finish April. As commodity prices fall, and planting picks up pace, veteran analysts explore the outlook for commodity prices in the months ahead.
Naomi Blohm of Total Farm Marketing by Stewart-Peterson thinks the market simply ran out of fresh bullish news for corn prices. And for nearby soybean prices, she says those hit some technical resistance on daily charts.
“As we wrap up the week, we also have May options expiring on Friday of the week,” she says. “And sometimes the market will respond and head towards where there’s the most open interest for those contracts.”
As corn, soybean and wheat prices retreated this week, farmers are also making decisions on pricing new crop, with some even holding on to old crop. Blohm says for new crop, it’s not time to panic yet.
“With the new crop corn and the new crop beans, just really be mindful that a lot of times the biggest seasonal push higher will come the last week of May to the first week of June,” says Blohm. “That is your opportunity to get those forward contracting done, get puts bought on unpriced bushels and even be thinking about the ‘24 crop.”
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“Normal weather and no drama means potentially large crops which is going to just weigh on the market price,” says Blohm. “So be aware of the seasonals and have the courage to be forward contracting when your corn is just coming out of the ground. It can be the scariest time, but oftentimes that is your best opportunity.”
If farmers still have old crop to sell, Mark Gold of StoneX Group admits they may have missed their best opportunity to sell. However, he thinks old crop still has a story.
“I have no idea why they’ve been sitting on old crop. You’ve had an incredibly strong basis. You had the spreads between May in July, to huge levels. They’re losing some of it on the roll over now into July. But ultimately, old crop still has a story. The government kicked the can down the road on the WASDE report. I would expect the May report to show smaller stocks than we’ve got now, particularly in corn and old crop beans.”
Gold says by the time August and September roll around, he thinks the old crop soybean situation will be extremely tight.
“We see Argentina looking to buy maybe as much as 11 million metric tons of beans from Brazil. So that tightens their stacks up a little bit,” he adds. “I just don’t want to get too bearish down here. I think the crude oil has been part of it. I think the Russians have been part of it. But I think it’s a fairly good buying opportunity, if you like the long side of the market.”
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