Minnesota Broker Says Another Week Grains Defy Logic [Listen]
I guess you could say it was another week of more of the same! Both corn and beans seemed to ignore the basic fundamentals of tight carryover stocks. Plus weather concerns like hot and dry in about 30 percent of the mid-west, hot and dry weather for much of Brazil's second crop of corn, and early frost that hurt the corn crop even more. Gordy Kralovetz with Chiodo Commodities said this just "does not add up." It defies logic that the grain markets do not understand what hot and dry means?
Gordy reminds us that just over one year ago during the pandemic corn was under $3.00 a bushel and beans under $8.00. There was a very good crop growing in the field and all we heard from analysts was how bearish everything was. Grain prices were going even lower. So, farmers were advised to sell corn and beans before prices went even lower and a lot of grain was sold. Then grains began to rally and never looked back for a number of months.
Is the same "full court press" going on again this year? Gordy said he had calls from many of "his guys" saying they heard on Farm Radio about sell now before prices go even lower. I head a number of articles titled Is the Weather Market Over?" While at the same time some of Gordy's livestock producers told him they wanted to book soybean meal for August and were told none was available. One was told bring in a load of beans and then we will sell you some meal?
No one knows for sure what is going on but it just does not make any sense? Plus in the cash market the basis keeps getting wider. It just does not make any sense. Click on the link and listen to Gordy discuss this weeks grain and livestock market action.