The USDA Supply and Demand report on Tuesday provided a bounce in corn and soybean prices, but not a significant change in the bearish tone of the market. Purdue Ag Economist Chris Hurt says we may be close to setting a bottom on prices, “Producers have been hoping the market would find a bottom; and, while we may not rally much from this level, I think there is some hope for better prices going forward.” During the Fort Wayne Farm Show this week, Hurt told farmers that the lower yields and small grain stocks figures may help the market finally stop moving lower.
Hurt warned that we are not likely to see any kind of a sustained market rally anytime soon, “I think the next change for a market rally will be spring when we get an idea on what planting weather will be like.” He added that right now the market is banking on no planting delays or weather problems. He urged producers to watch for small spikes in the market and sell into those up moves when they can.
The USDA report indicated that the supply/demand situation remains the same — lots of supply and not a lot of demand. “For the past 3 years, the world supply of grain has been larger than the demand for it,” said Hurt. He said the USDA report showed steady demand from the livestock and ethanol sectors, but lower demand from the export market, “The strong value of the dollar and the lower values of currencies from countries like Brazil, make US corn and soybeans non-competitive on the market.” Hurt added that the situation looks a little more hopeful for soybeans than corn.