Market patience encouraged
BLOOMINGTON – An analyst with Agrivisor believes farmers should have a little spring in their step but still have patience as we move through 2017.
Dale Durcholz noted at the recent Livingston County Agronomy Day that we have basically been moving sideways since last summer.
“That’s not a market that’s ready to trend down again,” he said.
There are few factors to be positive about, such as interest in putting money into commodities and wage inflation. Durcholz is starting to see the wings of inflation gain ground again.
“We are seeing some growth finally happen in Europe. That’s a plus,” Durcholz said.
Somewhere along the way, Durcholz sees the dollar starting to weaken for some reason. In recent years, soybeans have penciled out better than corn on a per-acre basis. Planting for the coming season is going to be a big deal.
“We have two world bean harvests that are equally balanced. We are getting due to have some hiccups again.”
The demand base remains strong since we are consuming a lot. Argentina has had very interesting weather this year and the market isn’t going to have much downside until we get a good crop in the ground with good prospects. Durcholz remains patient with soybeans waiting to see how things turn out. He believes there is plenty of time to price November beans.
“Somewhere along the way, we will have a drought and no one will expect it,” Durcholz explained.
Drought conditions persist in the southeastern United States. These weather patterns tend to start southeast and gravitate toward the Midwest. Durcholz says to start considering forward selling for the “long haul” if we see nice rallies of prices in 2017. He believes $5.50-$6.00 corn is all the further prices will go realistically. Durcholz thinks farmers will have an opportunity to sell corn at $4.00 or $4.25.
“You’ve got to manage yourself through patience,” Durcholz advises.