Farmers waiting for markets to recover and crop prices to continue to rise could be in for a very long wait. Instead, IntelliFarm founder Brian Vos points to his current parallels with the NBA playoffs and the grain market. Catch the bounce and don’t miss the free throw. Because that’s about as good as it gets.
In other words, Voss warns that this recent (albeit small) rise in crop prices is a technical, rather than a fundamental, rally, and technical gains tend to come down sharply.
Whether trying to get a full 23-year crop or a 24-year profit margin, Voss says farmers should keep realistic expectations about where prices are headed.
“Seasonally, mid-May signals the end of the spring bull market,” Vohs said, noting that several fundamental factors support his bearish outlook.
Globally, balance sheets are not tight and demand is being covered, Vohs said, adding that so far China is not in the mood to buy new soybeans from the United States. This could result in higher average canola prices over a 10-year period compared to a 3-year average, for example.
Voos says the “high price” race in grain marketing is rarely, if ever, successful, and knowing production costs is a strong indicator to be confident in pricing in a downward trend in margin prices. To tell.
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