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| The farmers take a hit because the end users are out of storage and drop their bids to slow grain inflows to actual usage rate or less. Large growers I’ve talked to over the past couple years have been holding as much physical grain as they can while praying for a bottom in the market. It’s possible that prices could rise in the short term before harvest is in full swing, but “Harvest low” is one of the most dependable axioms you can count on in this business.
I see 4 things that could put an early bottom in the grains:
1- interest rates do a swan dive (not likely)
2- Dollar does a swan dive
3- Equities take a dive and the funds move money into commodities (price goes up and basis widens)
4- Ukraine event that removes their production from the market
#4 is the only one that can substantially address the surplus grain in storage. #2 could also help clear the surplus but to a lesser degree. | |
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The markets job.
