After Wednesday’s USDA report, the market may have put in the highs for corn and soybean prices. There were some bullish surprises in the Supply and Demand report and the futures market reacted accordingly. But prices moved back lower on Thursday, and Dan Hueber with the Hueber Report says we have put in the highs on corn prices, “It is pretty hard to justify corn moving a lot higher than it has.” He told HAT the $5.20 range that prices moved into after the USDA report will probably to the top in the market. “Unless we have problems with planting or production, I think we have priced in what we know about the supply and demand picture for the 2014 crop,” he added.
Hueber said that Wednesday’s report shows, overall, a good world supply of feed grain that will also keep a lid on corn prices, “World coarse grain stocks were increased .72 MMT to 192.18, compared with 164.73 in 2012/13 and 166.54 in 2011/12. In both cases, this will be the largest stocks to usage ratio since 2009/2010.”
Hueber also thinks that an increase in US soybean planted acres will likely keep bean prices from going much higher, “You look at the nearby beans and we pushed above the $15 mark on Wednesday but fell back below $15 on Thursday.” He sees a soybean high water mark of about $15.25 and a new crop high of $12.00 to $12.50 as about the best we are going to see.
Of course, a major production problem this year could change all that. He told HAT it is hard to get the market too excited about planting delays this spring, “I don’t see the market getting too excited until we get to May. We know when the conditions are right we can put a lot of crop in the ground very quickly.”
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