This week the markets have shown many points of stress, as they react to Monday’s USDA report that shocked many farmers and analysts.
On RealAg Radio on Thursday, Shaun Haney was joined by Ted Seifried of Zaner Ag Hedge to break it all down. Seifried described Thursday’s pricing action as a day that the “dust tried to settle.”
Corn was up in the the near months with the the Dec contract closing at 371-0, up 6-0 on the day. Soybeans were down 7-2 and closed at 870-6 while KC wheat December contract was up 3-4 to 404-2. Besides corn, K.C. wheat and canola, all agricultural commodities were lower on the day. (A summary continues below player…)
Corn and soybeans: two stories
With the volatile pricing action this week, corn and soybeans can be viewed differently.
- “We have gotten really oversold in a very short period of time on corn, while soybeans were under pressure after the export sales report,” say Seifried. For whatever reason you choose, the soybean chart has not broken to the down side like corn has.
- On the USDA corn yield forecast Seifried stated, “A world does not exist that we planted 90 million acres of corn and we have a 169 yield based on when we planted the crop.”
- Haney challenged the 169 yield estimate based on the serious frost risk posing the U.S. corn crop due to late planting. “We are definitely not out of the woods, yet,” said Haney.
- On soybeans, Seifried, Haney and many farmers were surprised that the soybean yield was left unchanged at 48.5 bu/acre based on mounting concern over poor growing conditions.
- Seifried thinks that if the August weather holds we could see a later revision to 46bu/acre as a national yield but a 45 or 44 is still possible.
- With the lower acres in 2019, lower yields and the possibility of trade deal, the stocks of soybeans could get very interesting in the latter half of 2019/2020 crop year.
Does Seifried have new price targets for corn?
- “We are in the process of building a base in corn but I am not sure if we have finished that yet.”
- “The market really wants to flush out the longs but its unclear whether the funds want to be short this market at these levels.”
- “I am looking at 415 to 450 as a new middle of the range target.”