(IARN) — American producers greatly anticipate China’s return to the U.S. grain markets. The move, however, is taking longer than expected.
A commodity analyst offers his advice on the matter.
Matt Bennett, co-founder of Ag Market Net, is not surprised by the lack of market action, following the signing of a Phase One trade deal with China.
“From an old crop perspective, you’re going to see basis levels respond whenever the market goes lower because they’re having a hard time originating grain. As far as new crop goes, any chances above four-dollars, we need to pay attention to. I, like most people in the industry, think we’re going to have a pretty big acreage this spring.”
Bennett says producers need to be patient and manage risk when profit is on the table.
“You have to be able to manage risk whenever profit is on the table. We’re looking at a lot of folks’ breakevens and running profitability scenarios. Producers can lock in at four-dollar corn and lockin a better situation than what they had a year ago. My advice to producers would be to be proactive about your situation and then do something about it when you have some black ink because there are no guarantees you are going to have that stick around forever,” Bennett said.
Story courtesy of the Iowa Agribusiness Radio Network.
KIWA Stock Photo
