12-18-2013 08:11 AM
Not much longer and we turn the calendar to 2014. I know this is a year, for farm markets, that could turn some people's hair gray. I wanted to throw out this thread and see if we can get you to put on your prognisticator's hat.
I'm hearing that the soybean market could start the year by hitting its high between the Jan-March quarter. After that it's anybody guess where the bottom is. Where do you think this market goes in 2014? Right now we're trading $13.35 soybeans. Where does she go?
I haven't talked to anyone (farmer or market specialists) that have an outlook that sees any better downside of someting with a $3 in front of it and a topside mark of $5 in front of it. Where do you see this market going in 2014.
The analysts have often said tell me where the corn market is trading and I'll tell you where wheat is going. That is not necessarily the truth anymore. Wheat, where is it going in 2014?
Adjust them there hats and let's hear it.
12-18-2013 08:30 AM
It`s nothing more than a guess. I mean if there`s weather problems, or Janet doubles down on the QE and inflation funds come into the market, it`ll be high.
If Janet tapers, everybody gets planted and perfect weather all summer, there`ll probably be alot of long faces next fall.
If someone can make money with low $4 corn and $11 beans, maybe they should lock in those prices on 1/3 of what they think they`ll get in 2014 and hope it`s the worst sale they make. One of the anylsts were warning about the use of options in `14 cause you could get chopped up, but I don`t understand them and leave them alone anyway.
12-18-2013 08:55 AM
Mike, I wish my crystal ball worked better! My thoughts are this. I think farmers should lock in at least some 2014 soybean production between now and mid February. New crop soybean contract prices in the $11.20 to $11.80 range could make farmers decent money, especially if the price of beans has a $9 in front of it by harvest. Most guys may forget that cost of production is down, at least on the fertilizer side of things, so $11.60 new crop beans would be like selling near $12 beans last year. I think corn will find some solid ground going into planting season. The sky is not really falling in the corn market until we have another big production year in 2014. We will probably finish 2013 with an average corn yield of 162? Correct me if Im wrong, but we have only exceeded an average yield of 162 one year (2009) so contrary to what most market gurus or USDA will tell us, the trendline corn yield is only somewhere around 156 to 158 bpa. With less corn being planted in 2014, I think we will see some decent marketing opportunities for corn in the next year, we just have to be patient. Wheat is anybodies guess. Unless we see major problems in the Russian or US wheat crop with winter kill, I would say wheat trades sideways for a while.
Their is always risk involved with trading futures and options..... Especially bsands marketing advice. If you hear he sells... Wait two to three weeks to sell and you will probably hit the highs for the year LOL!
12-19-2013 08:57 AM
Virtually every southern MN farmer I have talked with says they are sold out of soybeans from this fall. I know that the local processors were running on empty before new crop supplies came online, and I have heard that soybeans were even brought in by train. Something is up since the few times I hauled a semi load in to the processors, there were 40-50 trucks waiting for meal, and not another truck with beans waiting to unload.
My question is this...how do we get from here to next fall with soybeans? Not to be real bullish, but does anyone seriously think we are going to import SA beans to southern MN and other places? My gut says that we will see $15 soybeans again. Maybe someone needs to pinch me.
12-19-2013 10:10 AM - edited 12-19-2013 10:11 AM
I am in the mix that would put corn in the wide birth 4 to 6 -------- but my gut says it could be wider than that. I do tend to want to be bullish as a producer should, but there are some observations to be made.
The use of the logic that genetic improvement is increasing yields. Is just one of those great sales lines that is very difficult to disprove. I don't think it is a lie, but it is a statement a person searching for absolute truth probably would be nervous to say.
In our ever impressive desire to give man the credit for all things it sounds good but has never proven to be anywhere the improvement that irrigation, fertilizer, weed control, and better harvesting methods have been. irrigation took large acres in the west from 30 bpa to 200pba in two years.............................................
Climate always trumps "potential"
2013 is still the only year I remember usda predict greatness and not make a seasonal adjustment until fall. They are normally cautious about being on the promoting side of the market ----- "big crops keep getting bigger" comes from this normal usda conservatism on claiming big crop until harvest reports.
Biofuels ------- The movement to redefine biofuels as those not created from corn, while it is all politics at all cost, is a 180* change in direction by some that beggs the question why?
Is it possible that "politicians"(and their money support) were much more shaken by supply issues and the volatility in the market than we thought. Food supply is the one real "throw them out" issue and the ethanol production train is rolling pretty good. It probably is not going to stop even if all the financial supports get pulled-----------------
If so someone up there agrees with me that 35 days supply is not an overwhelming supply of corn. --------- Even if we really had it.
I think it is too unpredictable to know where we go in corn, but I agree with usda on the one issue ---- $7 corn increases supply. Now will usda predict increasing supply at $4 corn. I think yes, the question is will that prediction control price volatility?????
Wow to world demand. Should be stable at 11-13 unless China has stolen enough seed technology for this years crop. Hard to take a position on that issue. It is one way we might see $90/unit corn seed again --------- and we might need that desperatly.