The wheat market doesn’t look much brighter, Georgantones said. “There’s no story in the wheat market that is bullish right now. We have a stocks-to-use ratio of about 30 percent. And with all of the poor weather in the Dakotas and parts of Minnesota, there’s already talk that corn acres are going to shift back to spring wheat, because they’re going to be hard pressed to get any corn planted early this year.

“The wheat market is going to be a drag on corn, and vice versa. With the corn market getting killed for a dollar in two days because of the (March 28) stocks report, we’re back to feeding corn again in place of wheat.”

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World carryout in wheat rose from 178.2 million tons to 182.3 million tons. “I think wheat is going to roll down to the $6 to $6.25 area as we get into winter wheat harvest. We’re going to need weather to affect the wheat market, and right now I don’t see that catalyst.”

Tightness in old crop corn and soybeans is keeping optimism high, noted Georgantones. “The soybean old crop story is still really alive. It’s probably going to stay that way through the beginning part of the summertime. The logistics problems in South America have created a shift in some soybean demand coming to us. USDA raised soybean U.S. exports by 5 million bushels and crush by 20 million bushels. Beans are going to remain tight. China has been a big buyer usually on pullbacks.”

 Georgantones said the tightness “is eventually going to be alleviated with a huge South American export program. And then, with all of the acres we planted here and a trend line yield, (we’re going to see) quite a bit lower prices.

 “New crop corn is probably moving down with a decent crop to $4 a bushel this year. There will be a lot of pain for the farmers who didn’t lock in. New crop soybeans are probably headed down to $10 a bushel, provided we have trend line yields.”

Lower corn and soybean prices should start building some demand back into the market, Georgantones said. “But it’s going to take some time. If we can bottom these markets out at decent levels, we’re probably going to get some Chinese buying in corn and soybeans. We can build some demand, but we have really hurt our demand base in this country.”

erobinson@farmpress.com

 

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