Corn and Cattle Prices May be on the Rise According to AgResource President Dan BasseTue, 19 Sep 2017 11:50:13 CDT
Opportunities in agriculture are starting to look up, says one AgResource market analyst.
“Well, we are not as bearish of agriculture has been over the last three or four years. Agricultural opportunities seem to be bottoming out,” said Dan Basse, president of AgResource Co. “We believe the banker is cutting back in some of his lending. But we do believe that this year's corn and soybean crop won't be as large as last year. We see the U.S. corn yield between 164, 166 bushels an acre. As maybe soybeans 47, 47 and a half and that will provide some levity. We also like the opportunity from China in beef. We think that the Chinese will be looking for beta-agonist-free beef sometime in early 2018. And that will provide an opportunity, along with strong consumer demand, domestic demand, to get some improving beef prices and cattle prices as we look forward to the first and second quarter of 2018.”
To watch a video clip featuring Dan Basse, president of AgResource Co., talk about a prediction of an upward trend in cattle and grain prices he made at the recent Feeding Quality Forum, click or tap the PLAYBOX in the window, below.
He believes drought in the Northern Plains pushed cattle placements earlier and that means lower prices in the near-term will improve into next year.
“And that combination of seasonality and fewer supply should give us a run up to maybe a 124, 128 dollars per hundredweight and then thereafter, we should start to see prices easing down. But we're going to bottom, we think, in the fourth quarter somewhere between 100 to 104,” Bass said. “So, it is a nice run to the upside as we look forward to 2018.”
Other countries cutting back numbers, and increased domestic and export demand will also bolster prices.
“Consumers are eating more beef in this country than we've seen in an awful long time. We have to go back to 2008,” he explained. “So, increasing lower beef prices has caused the consumer to reach for supply. And we think that this is something that will continue. So, going forward strong domestic demand, better export interests, particularly from China, should give us that demand pull market as supplies tighten and we look forward.”
He advises cattle feeders to look for breaks in the market to secure feedstuffs.
“We say that because, as yields come down and farmers find out they don't have all the crop they had in years prior, that they will be stronger storers of grain. And we'll see more demand coming from China, in terms of soybeans,” Basse asserted. “So, we think the next couple of weeks are key for the U.S. feedlot industry to get some stuff priced.”
Basse says it’s not a strongly bullish market, but it’s bullish none-the-less.
Source - Certified Angus Beef
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