Sell-offs have continued for several days in the grain markets leading to lower prices for corn, soybean, and wheat futures. One commodity broker says there are a couple of reasons.
“I think it’s a combination of lack of demand for old crop corn and soybeans. It also looks like the new crop is going to get planted in a timely manner - so, as far as I’m concerned right now, we are going to have more than ample acres planted corn. Soybeans are going to fight for acres, but right now there’s just nothing threatening out there,” said Tom Fritz.
Russia’s war in Ukraine continues to be a wildcard when it comes to corn and wheat prices, especially with the Black Sea Grain Deal set to expire next month.
“If Russia decides to pull out of the Black Sea Grain Deal, Ukraine will be taken out of the export market, so that would give our corn and wheat market a bit of a lift. Three weeks from now when we get into mid-May, we’re going to see where we are with this Black Sea Deal. It seems like every time there’s a legitimate threat to this deal getting shut down, the market responds with a rally. Given what the market has done over the last week, we’re now prone to a rally.”
Fritz also points to the U.S. soybean market taking a back seat to Brazil, with the U.S. importing more soybeans earlier in the season.
