The season’s biggest report was published last week and was mostly neutral for farmers. Basically, yields didn’t meet expectations, but neither did demand. World stocks are adequate to burdensome and with so much 2015 (and 2014) grain still unpriced, a significant rally is unlikely without a supply disruption. Factoring in 2016, which is largely unpriced, many are pessimistic for the next year.
Other potential bearish events….
- The new bird flu in Indiana may spread to other states and lower feed demand for corn and meal.
- Crude oil may trade even lower than its current 12-year low, affecting ethanol margins and corn demand.
- Financial markets around the world declined, which may spill into the commodities markets.
- Argentinian wheat is due for arrival into North Carolina ports this week, creating a rare opportunity to source grain from outside the U.S. when domestic stock levels are abundant.
The negative side of DP (Deferred Pricing) grain
“Free DP” isn’t actually free.