For the past 6 months, analysts and economists have been predicting a year of financial loss for most corn and soybean growers. This all changed as unprecedented rain and flooding, in June cause massive crop loss in the Eastern Corn Belt. Yet the USDA confirmed in its June 30 stocks report and again in Friday’s Supply and Demand report, that grain and soybean supplies are now and will likely continue to be much less than expected. Bob Utterback, with Utterback Marketing, says the market is just beginning a major move higher that will give producers the chance to sell above the cost of production, “Instead of looking at selling this year’s crop at below the cost of production, the market will now give producers the chance to sell above the cost of production.” Utterback sees the likelihood of stronger prices early in the new week and then a market correction, “But it will not correct very far and will still be reacting to the weather situation for the rest of July.” He told HAT he does not see corn prices going back below $4.
For growers who have lost a sizeable portion of this year’s crop or who will have reduced yields, Utterback says there is a chance to lock in profits for the 2016 crop, “This is the brass ring. I see solid profits for the 2016 corn and soybean crop.” He told HAT that growers need to take advantage of this unexpected turn of events, “Farmers need to be ready to move if the market offers them 2016 corn at $5 and soybeans at $12. If you are more than 50% sold on your 2015 crop you can be patient, but be ready to move to lock in profits for 2016.”
In the Friday report, old-crop corn stocks drop 97 million to 1.779 billion bushels, down 32 million bushels from trade expectations. New-crop corn stocks came in at 1.599 billion bushels, up 59 million from the average trade expectations. The agency boosted its projected average on-farm cash price to $3.70 per bushel, up a nickel from June, while pushing its new-crop price to $3.95 per bushel, up $0.25 from June.