Kansas Association of Wheat Growers

September 11 Dan Maltby Marketing Newsletter  

Last week’s markets were very quiet, mainly waiting on fall grain harvest to gain momentum, and either force new lows on much better than expected yields…or, force short-covering on disappointing yields and watch the market struggle to buy grain from disgruntled producers.

There is also another possibility, of the market basically doing nothing for a long time, on good enough yields and fair-to-middling demand, and we plod along for months.

And that might be the most likely scenario.

Here’s Dec corn, plodding along, trying to come up with a reason to head back up to $4.00:

The corn market bottomed last September, and rallied about 40c into late winter, chopped around during planting season, and faded on every timely rain.

Demand has been steady, but competition has been tough, with South America producing near record crops, after the previous year’s record. Back-to-back gigantic corn crops from Brazil and Argentina eliminated the need for the USA to produce a record yielding corn crop in 2017.

Thus the corn market remains in the doldrums, and even though it’s “cheap”, it’s only a few cents away from a new round of sell-stops, which in my opinion, very few USA corn growers, if any, are ready for even lower markets.

And that’s the problem. Prices are crummy, but that doesn’t mean they won’t get crummier. Any winter wheat farmer is way too familiar with that concept.

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Source: Kansas Association of Wheat Growers

 

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