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USDA’s corn & soybean demand numbers boosting market optimism

The co-founder of AgMarket.net says the USDA’s updated corn and soybean supply and demand numbers should provide support for commodity prices.

Matt Bennett says the pre-harvest rally already priced in a sub-10% stocks to use ratio for corn, but there’s still reason for long-term optimism.

“The corn market should stay somewhat supported even though it’s a time when you typically see some weakness because ultimately you really need acres next year again.”  He says, “You need a lot of acres of corn. I think you’re going to have to keep the price elevated or they may not show up.”

He tells Brownfield the September report also shows strong soybean demand.

“Last year to this year, there was over 5.5 million acres additional of soybeans. The carryout went from 325 down to 310.”  He says, “So ultimately, you’re using so many soybeans here you’re actually drawing world stocks down just a little bit.”

Soybean prices felt downward pressure from the report, but Bennett says that was likely brought on by record long positions held by managed money.

“It wasn’t a negative report. The yield went up just .1 up to 52.8.”  He says, “The funds have been buying the heck out of both corn and beans. And I do think there was some profit taking going on along with some hedge pressure, as people got out in the field, and so I think that was a big part of it.”

Bennett says despite the optimism, recent prices are the best producers have seen in several years, so many customers are taking advantage and locking in sales.

AUDIO: Matt Bennett – AgMarket.net