At my first seminar in Iowa this winter, a longtime customer didn’t hesitate to shout a question: “Al! Corn carryout is less than 1 billion bushels, and soybeans are less than 250 million bushels. So will corn prices get over $8, and soybeans over $18?” I told him to sit tight, because I would be talking about exactly that question.In the latest reports, USDA is projecting very tight ending stocks. Historically, a certain amount of ending stocks corresponds to a predictable bump in price. For example, if the stocks-to-use ratio in corn is down to 8, you would expect a rally of $1.20 to $1.50 per bushel. For soybeans, if the ratio drops under 5, then you expect a soybean rally of $2.00 to $3.00 per bushel from the harvest lows.
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