Grain Market Bull Run May Be Overdone, Warns Rabobank Analyst

Stephen Nicholson, North American head of crops for Rabobank, warns that the grain market bull run may be overdone. He believes farmers should focus on the fundamentals rather than getting distracted by external factors such as oil prices and war news.

Nicholson points out that supply shocks are typically short-lived to the upside, and the current rally is fragile. He notes that the global harvest is still expected to be good, with last year's crop being record large and this year's crop smaller but not a disaster.

Despite concerns about crop troubles around the world, including Europe's wheat and corn crops, as well as Black Sea crops facing difficulties getting to market, Nicholson remains optimistic. He believes that the U.S. crop is bigger than many believe, and it will be hard for the bulls to continue feeding on fear.

Nicholson encourages farmers to consider selling some of their crops at today's prices because there is money to be made. He also suggests that farmers should hedge their input purchases with grain sales rather than buying inputs now expecting prices to climb further.