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Upside potential following bullish WASDE
Farmers might be wondering how much higher corn and soybean prices will go following Tuesday’s bullish USDA supply and demand report.
Global Commodity Analytics president Mike Zuzolo says he tries to avoid predicting market highs and lows and instead points clients to what’s over and under value.
“So I think with these carryover levels where we’re at in both U.S. ending stocks and global stocks-to-use ratios, if the weather market continues to present a lower crop potential for South America and for us in the U.S., we probably have still more to go.”
He tells Brownfield he would not be surprised to see another five to eight percent rally in the grain markets, but there’s a caveat.
“In 2020 I felt very strongly about a sell and defend model of being very conservative about how I hedged and used a lot of bought puts and kept a lot of cash sales in the rears. And it looked really rough for me until we got to about the August time period.”
Zuzolo says he thinks that “sell and defend” approach of locking in profit per-acre will be a good strategy again in 2021.
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