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Analyst says market run-up is a “gift”

An analyst says farmers should be taking advantage of the current run up in corn and soybean prices.

Dr. Michael Cordonnier, president of Illinois-based Soybean and Corn Advisor says the rise in commodity prices is a “pure gift”.  “Nobody expected this a month ago,” he says.

Cordonnier says there is a lot of speculation about what is causing the run up in the markets.

Is it fundamentals or money flow?

He says both.  “I would say right now it is probably 20 percent based on fundamentals, because of South America,” he says.  “And then 80 percent because of money flow – they money has to go someplace.  For the deferred months it may be 30 to 40 percent based on potential fundamental problems.”

He tells Brownfield the threat of a La Nina is another factor.  “La Nina may or no may influence our (the US) crop, but it will be here in time for South America,” he says.  “You got to think about South America all the time because they are now much bigger producers than North America.  South America actually makes the soybean market.  Not North America anymore.”

Cordonnier says because the La Nina would arrive in time to affect the next South American crop, funds would continue to be tied to the soybean market.

AUDIO: Dr. Michael Cordonnier, Soybean and Corn Advisor