#564 - “How Low Do We Go?” - Weekly Market Outlook: Feb.19–23

The Ag View Pitch

Jeff Fichtelman visits with Chris in this week’s Market outlook episode.

Jeff talks about how the Funds continue to add to their short positions, pressuring price levels.

The funds continue to follow the trend lower and seemingly increase the price pressure as they add to their short positions.

Fortunately, some areas are starting to have improving basis levels, however; if prices do start to rebound, these basis levels will evaporate rapidly.

Jeff goes on to explain the phenomenon called “price decision fatigue.”

He points out that many producers mentally have decided not to make sales until the market rebounds. Unfortunately, the price has done nothing but go down systematically since late October. This downward trend has created the situation that mini producers are paralyzed and not willing to make sales at this point.

Jeff challenges producers to make a sale at some point on old crap bushels in order to at least price some bushels with the hopes of that being the “worst sale” of the remaining bushels. Conversely, if the price does go lower at least you’ve got some sales on the books.

With the funds being short and producers having a huge volume of old crop corn on hand, the likelihood of much of a price increase is limited.