Many marketing advisers say farmers should avoid locking in too much of their expected crop if they’re having harvesting problems and aren’t sure what will end up in the bin.
Current strong crop prices – including Chicago corn at more than $5 US per bushel, Minneapolis wheat at more than $7.70 per bu. and Winnipeg canola at more than $475 Cdn per tonne – are not likely to collapse soon, they say.
“Let’s get it harvested. Let’s get the sample in the bin and then let’s see what it grades,” said market analyst Jon Driedger of FarmLink Marketing Solutions in Winnipeg.
Read Also
Interest in biological crop inputs continues to grow
It was only a few years ago that interest in alternative methods such as biologicals to boost a crop’s nutrient…
“Then you can make some better decisions, rather than rushing to get ahead of the curve.”
Most market advisers believe there is good fundamental support for most crops, so if farmers are unsure what they’ll finally wrangle into the bin, they should be cautious with sales.
“There’s a pretty high risk that there are going to be some quality problems out there,” said Derek Squair of Agri-Trend. That means individual farmers run the risk of mismatching sales commitments and actual production, plus the myriad production problems across the Prairies mean some crops could see further rallies.
Prices usually decline in the fall as farmers push new crops into the elevator system, but that is not happening on the Prairies. And in the United States, declining corn yield projections have sparked a rally.
Both Driedger and Squair said they think oat prices have good prospects in the winter because of harvest problems.
Squair said he was “fairly bullish” on canola. Driedger said canola prices have been strong, but they appear to have had trouble breaking through resistance just above today’s prices, so that means it might be the best crop for farmers to price now if they can get it in the bin.
“If a guy was to sell something, I’d maybe be inclined to peel off some canola sales,” said Driedger.
Rich Nelson of Illinois-based Allendale Inc. said he thinks wheat prices are the most vulnerable of the big three U.S. crops.
“We think the rally based on (drought conditions in the former Soviet Union) hype is over,” said Nelson.
Allendale does not expect a wheat selloff soon, but it does not expect to see higher prices or continued strength in wheat into the winter.
Soybeans appear to be fairly priced now, Nelson said.
Corn should have room to run, as yield predictions continue to be downgraded.
