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Grain market analyst: reward the rallies

A grain market analyst says farmers may not see improvement to commodity prices anytime soon. 

Steve Nicholson with Rabobank says what’s going on in the market this year is much different than in recent years. “In the past, we haven’t had the stocks,” he says.  “But now we’ve got over 2 billion bushels of corn stocks. You’re climbing to over 500 million bushels on soybeans. So the markets are going to go, I don’t need to worry about this, I’ve got plenty of supply for a backstop. I don’t need to rally to get it out of the country.” 

He tells Brownfield, “You’ve got to reward rallies.”  “That’s your first mantra: If you get a rally, you better reward it,” he says.  

Nicholson says farmers also need to figure out what it costs to carry the crop. “You’ve got to carry the market,” he says.  “Do the work to figure out, does that make sense to do? Keep in mind you’ve got a higher interest rate now, so your opportunity cost is more.”

He says another option is to sell the crop at the lower price levels and move on to managing this year’s crop. 

Brownfield interviewed Nicholson during the 2024 Farm Progress Show. 

AUDIO: Steve Nicholson, Rabobank