(417)232-4525 | (800)400-9242Monday - Friday: 8:00am - 5:00pm | Saturday: 8:00am - 12:00pm

This Week’s Market Forecast from Minnesota Jon…

Jon Scheve
Jon Scheve

 

 

 

 

Market Commentary for 3/18/15

 

Travels to Ohio 

Last week I did several presentations in Ohio educating farmers on how they can increase profits with on-farm storage, hedging and using basis/market carry.  It was a great opportunity to speak with Ohio farmers one-on-one to learn more about issues they are facing. More than ever it seems farmers are willing to embrace advanced/sophisticated grain marketing strategies as prices remain stagnant. 

 

Right now, many in the trade think farmers will turn to heavy soybean acres, while largely across the biggest corn states (i.e. IA, IL, NE, & MN), this doesn’t make sense.  The exceptions may be the more “fringe” states like Ohio.  When considering yields and prices, most Ohio farmers would benefit by switching their acres rotation.  However, of the Ohio farmers I spoke to, most indicated they plan to keep their rotations relatively close to “normal.”  

 

Global Impact

Throughout the Midwest farmers seem willing to sell soybeans at the $10 CBOT mark (old and new crop). One issue facing U.S. farmers is the U.S. dollar increasing in value compared to other world currencies.  This means South American farmers are getting a great price for their beans, despite futures prices decreasing.  Some are speculating Brazilian corn will be delivered to the U.S. coast markets this summer.  If true, this would indicated prices here could be too high and further price rallies limited.

 

Corn Prices Remain Steady

Corn still hovers around $3.85.  As $4 approaches, farmers let go of old crop until prices dip.  Farmer selling is non-existent when the board price drifts to near $3.70.  There is no reason to think this trend will change until after 11am on March 31st, the next USDA report.

 

Weather

Some are worrying March has been too dry. Obviously memories of 2012 still runs deep in the minds of many.  With frost still in the ground in parts of the Midwest, it’s still too early to worry about drought today.  But, soil moisture is important to watch because in 30 days corn planting will start along I-80.

 

Planning ahead

Did you create a marketing plan for 2015?  As the busy planting season approaches, many farmers run out of time for their grain marketing planning.  Unsure of what to do, many do nothing.  It is more important than ever that all farmers understand their break even points and price goals for the year.  It makes implementation throughout busier spring/summer months much easier (i.e. more strategy and less emotion).  I’m even looking at 2016 sales if prices should rally.

 

Holding out for the top of the CBOT is unrealistic.  No one knows what the growing year will be like or how many acres will be planted.  While the 3/31 USDA report provides an estimate of the future, it is a long three months until June when a more accurate estimate is provided.  

 

Most farmers don’t realize that there is significant price risk both higher and lower.  While many farmers are hoping for market rallies, most farmers optimistically think the chance for lower prices is small.  The truth is, a case can be made for extreme movement in both directions for corn and soybeans.  

 

This isn’t what farmers want to hear.  The market seems to be trading near many producers’ break even points. This is why it’s important farmers need to be ready for every opportunity that comes along to squeeze every dollar out of the market they can.

 

I will be travelling to Cuba during the next two weeks.  Therefore, I will have limited to no access to the internet.  So, I won’t send my next enewsletter until after the 3/31 USDA report.  

 

 
If you have questions about the information above contact me at jon@superiorfeed.com  to discuss further.

 

 More Market News…

CME Group

Thu, Apr 16, 2015
Futures options trading has exploded in recent years as a number of forces have merged to create an enticing proposition for investors. Market participants have been drawn to both growing liquidity and market characteristics that have evolved to turn the market into a trading arena that today can support increasingly [...]
Source CME Group Agriculture Market Commentary
Thu, Jan 09, 2014
Rising crude oil production in the United States contributed to relatively stable global crude oil prices in 2013, at around the same annual average levels of the previous two years. West Texas Intermediate (WTI) spot prices averaged $98 per barrel (bbl) in 2013, up 4% from 2012 and the highest [...]
Source CME Group Agriculture Market Commentary
Wed, Jan 08, 2014
Much cheaper feed has led the pork industry to begin an expansion that is expected to continue throughout this year. The current expansion means that pork supplies will begin to grow more rapidly in the last-half of 2014. Feed prices are expected to remain moderate with corn prices only increasing [...]
Source CME Group Agriculture Market Commentary
Wed, Jan 08, 2014
The U.S. economy appears poised for its best performance since the depths of the financial recession in 2008 and 2009. After four years of modest recovery, the economy has largely mended from the debilitating injuries received during the financial panic. And given the healthiest foundation for growth in more than [...]
Source CME Group Agriculture Market Commentary
Today’s Markets
Commodity Yesterday's Close Today's End
Wheat $4.00 Bu $4.00 Bu
Corn $3.36 Bu $3.36 Bu
Oats $3.75 Bu $3.75 Bu
Beans $9.28 Bu $9.30 Bu
Milo $3.12 Bu $3.12 Bu
Fescue .38/Wet - .40/Dry
*Please Call for Current Market Conditions.