IARN — Grain markets saw moderate declines on Monday, due in part to weather forecasts and trade woes.
Multiple factors contributed to Monday’s losses, according to Jim McCormick, branch manager of AgMarket.Net.
“The first thing is weather. A lot of places got a decent rain over the weekend, so you have a bit of weather pressure coming on. Then on top of it, you have a bit of a hangover from last Friday,” McCormick said. “President Trump, after the USDA report, said there was not going to be a Phase Two (trade deal with China). The market seems to take that as: If there’s not going to be a Phase Two, there’s not a lot of hope they’re going to hit their target for Phase One.”
“China is going to continue to buy into grain. We’ve heard (of) a lot of commitments being made,” McCormick said. “We had that big purchase of corn last week. China has sold almost one-point-one billion bushels out of their state reserves. Mind you, they’re selling corn that is four or five years old at five-year high prices. They definitely have a shortage of grain, (and) our prices are relatively cheap. I think there’s a very good signal that you’re going to see China come in and buy more corn in the long-run.”
McCormick expects to see continued pressure, but says matters could shift mid-week, depending on rainfall totals. In the meantime, he encourages producers not to panic.
“At these lower price levels, especially on corn, don’t panic. The fact if the matter is you knock Dec corn down near $3.30. If you bought the 85-percent crop insurance, you’re down to levels where your crop insurance levels are going to start kicking in under normal yield. If you have low trend yields because you got hit by bad weather, your insurance premium may already be starting to kick in,” McCormick said.
Story courtesy of the Iowa Agribusiness Radio Network.
