Sometimes December can be a friendly month for markets in the agriculture industry, but all eyes are on the current crop in South America. Justin Allaman with CGB Twomey company shares why the markets will react to their crop:
“If you look at the corn and bean markets recently, we have been sideways. Now, you can make a case that seasonally December can be a friendly month for both corn and soybeans. We don’t have the big weather story like we might in our spring and summer months, but also this is key growing season time for South America and Brazil, so you kind of think the equivalent of our June, July, August. They continue to add acres every year and China would much rather buy soybeans from them than they would be from us, so that is where the attention is right now; are they going to receive beneficial rains and have good yields, or will it turn off hot and dry? It is just yet to be seen.”
Allaman says it’s never too early to start selling ahead especially if South America produces another large soybean crop. Some farmers continue to look at their input profiles to determine where they might make some cuts based on their tight margins.
