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Senior Advisor

Thinking About 2016

Is anyone thinking about any positions for 2016 yet?  It's not a real rosy picture.

One gets the feeling we may be aiming for what we can get rather than what we need.  It's not fun to contemplate growing crops for break-even or losing money.  And that likely means hay will be worthless as well.

 

One can say it's way to early to get excited.  But the upside seems to me to depend on weather or the global economy or politics doing things we would think are outside the norm.

 

Plant it and don't worry about it?

 

Change planting plans and move acres around?

 

Sit tight and market after it's in the bin or start putting on positions or at least putting some offers out there?

 

We might have a long time to be uneasy about producing and marketing for 2016.

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12 Replies
Senior Contributor

Re: Thinking About 2016

I have a Rosy view of the future.  I do not believe we will have much more than a 1.3 billion carryover in corn.  That will bring future prices above COP on many farms. As always the chance of major crop failure somewhere in the world are high.  So the price will be more elastic than normal with the lower world stocks.  With normal local weather, I will hold until I feel the prices have neared a peak this year and next.

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Senior Contributor

Re: Thinking About 2016

So why is land still at 8,000 - 10,000 dollars per acre thru put the corn belt if things look so bleak??
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Senior Advisor

Re: Thinking About 2016

Do you think a short corn carryout will bring soybean pirces up enough to make it profitable or at least breadk-even to plant soyybeans or do you think they are a money loser for 2016?  

 

I wonder what soybean price it will take to buy acres this year or if people will sit on their rotation?

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Honored Advisor

Re: Thinking About 2016

I project the corn price will rise into 2016.   USDA will stop the rally dead in it's tracks in February with a prediction of massive corn planted acres and a yield prediction higher than we have ever raised nationwide.    Smiley Wink

Senior Advisor

Re: Thinking About 2016

Do you have a marketing strategy for your prediction?

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Honored Advisor

Re: Thinking About 2016

Jim, on the bidding war for 2016 beans.  The market has a carrot or a stick, some acres may default to beans as many believe you don`t have to fertilize, theoretically a no-till drill 50 bucks in seed and 25 bucks in chemical + your land cost and you`re good to go.

 

If corn is cheap, they can get away with cheap beans too, it might come down to "I`ll lose less planting beans".  Those that have a $400,000 combine in the 2013 Morton building and in the second year of a 3 year land lease don`t have the luxury of taking a sabbatical for an extended period of time until things get back to "normal". 

 

I`m afraid there will be blood before this is over.  Yellan could fire up the printing presses and the hedge funds fearing inflation could bail us out, but I wouldn`t count on it.

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Honored Advisor

Re: Thinking About 2016

Jim,  Just to inform you....Mine was a prediction of a prediction.  Smiley Happy  And.......yes.  My marketing stategy is to have most 2015 corn sold by February one way or another.....probably some sort of basis contract....and possibly some 2016 corn as well but probably not more than 25% or so. ( Unless, the fall and winter weather is quite a bit dryer than normal.)                                                I believe soybeans have an explosive rally coming......so not too sure of selling ANY 2016 soybeans anywhere near these current levels.

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Senior Advisor

Re: Thinking About 2016

Inflation may creep up a little but I agree with you that it's risky to bet one's farm that it will.  I agree with you that 2016 could be a very tough year.

It's possible that some may plant beans as the lesser of two evils, but bankers won't think much of that, although they may not be able to do anythng except tighten up on operating loans.

Planting corn while cutting back on inputs is another possible response to poor bean prices.  Cheaper corn seed, less fertilizer, early number to promote field dry-down are among the ways to shun bean planting but that gets to the heart of the question - if beans don't pay, how long will it be before corn is a glut and it doesn't pay, either?

 

Is there a time to lock in some corn prices for 2016, and is it sooner or later?

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Highlighted
Veteran Contributor

Re: Thinking About 2016

The International Grains Council on Thursday raised its forecast for the 2015/16 global wheat crop by 7 million tonnes to 727 million driven partly by upward revisions for the European Union and Russia.  Its world corn (maize) production forecast for 2015/16 was cut by 1 million tonnes to 967 million to reflect a diminished outlook for that crop in the EU.

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