Analyst expects global balance sheet to shrink even more on January 12th
The global balance sheets for corn and soybeans could be pared even further when USDA updates its supply and demand estimates next week.
U.S. Commodities president Don Roose points out the January 12th report will include final production totals for 2020.
“And I think there’s a fear in the corn market, as far as the yield, that it could shrink 1 to 2 bushels (per acre), we’ll see. Soybeans yield could shrink .3 to .5 of a bushel. But then on top of that, we could see our export demand go up on corn and the export on crush go up in soybeans.”
He tells Brownfield the market should keep churning higher until prices get high enough to ration demand.
“That’s what it’s all about. And the only way you could really tell is a look back program always. You know, whoops we were supposed to get big exports (but) they were poor. What it really comes down to is the structure of the market (and) bear spreads. Bear spreads don’t work in bull markets.”
Roose says that means the upfront markets quit going up faster than the back months, which he considers a caution sign when marketing.