Will Low Prices Cure Low Prices?

The corn and soybean markets anxiously await actual yield results in order to set price direction. So far that data has been mixed. Both corn and soybeans have placed a short term bottom.

Resistance in Dec corn has moved a little lower to 353. Support is the contract low of 344. This is a tight range and bearish yield data will force a test of the contract low. Producers needing to raise cash at harvest time should sell now. Producers without farm storage should consider selling upon harvest and entering into a minimum price contract. The cost of this contract will be considerably less than the delayed price storage rate. Talk to your MAC merchant about details of the contract.

Support in November soybeans is the 100 day moving average of 960 with resistance at 967. This is an unsustainably tight range and points to a breakout. The direction of the breakout is unpredictable, however, there is 50 cents of downside risk in soybeans if we break lower therefor producers needing to make sales this fall should continue to do so.

If the old adage “low prices cure low prices” holds true we will not see an increase in 2017 seedings and price will slowly improve into the summer of 2018. End users have improved spot basis values removing some of the market carry therefore producers holding 2017 production should consider moving stored wheat. Reownership might be in the form of May or July 2018 call options.