BLOOMINGTON, Ill. (WCIA) — Grain markets, financials, energy stocks and much of the market fell hard Tuesday. After the July 4 holiday, investors began pulling money from the market on recessionary fears.
“Anytime they are looking for inflation, commodities usually rally. So they’ll put money into those commodities,” said Kent Stutzman of Advance Trading in Bloomington. “We decided, now that we are getting recessionary concerns, we had probably a benign weather forecast, the U.S. dollar continues to rally; that’s really what spurred on the massive sell-off on Tuesday, and it was everything. Crude oil was off $10 a barrel, soybean oil was down the limit, natural gas was down hard, cotton was down hard, so it was a broad-based sell off that started early in the morning.”
Farmers have hopefully been selling their ’22 crop and hopefully have been selling their ’23 crop. You talk to them all the time. Were they really hurt bad by this?
“If they didn’t have proper risk management, some of what isn’t sold could be, yes,” Stutzman responded. “But I think as long as they’ve been selling along the way, they probably got a pretty good average, much higher than what we are looking at for today’s price.”
“You’ve still got to look at it from the profitability standpoint. If we’ve sold a good chunk at a really good price, this probably hasn’t hurt us all that bad,” Stutzman continued. “I think some elevators in the area would probably say they’ve bought 20%. I’ve got guys that are 30 to 55% sold. And if they’ve got risk management, they probably have some puts underneath them, which is giving them a floor that’s better than where we’re at today. So they don’t like the lower market, but they are not hurt either.”
So what do they do now?
“What I would suggest now is, obviously it’s probably hard right around Decatur over to Champaign and areas that haven’t been getting rain, its going to be hard for those guys that want to go sell something,” Stutzman said. “But I think we’ve got to be looking at selling some of this crop now that we’re up. It does have a good color, we’re going into pollination and I think you’ve got to be making sales on rallies.”