Via the hotline, we did recommend a 10 percent sale last week, but given the extent of the decline, we are reluctant to sell weakness. But if January futures move back to $10.45, we’d make a 10 percent sale, boosting the total to 60 percent. It will take production concerns in South America to lift prices significantly from these levels.
While we don’t have an official recommendation, we wouldn’t dismiss the opportunity to price a small increment of 2017 production with November 2017 futures over $10, especially if you are shifting acreage to soybeans. The ability to sustain most of the recent gains leaves us thinking higher prices will eventually be seen. The primary upside target is $11, or something close to it.
Market talk is centered on Chinese buying shifting to South America. But that shift is normal for this time of year. Early condition and planting progress signal no problems yet, but the situation is far from being ideal.
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