Analyst shares insights on 2017

PONTIAC – A market analyst with Advance Trading believes international policies and production elsewhere will drive corn and soybean prices in 2017.

Kent Stutzman of Advance Trading was the featured speaker at an ag outlook meeting Wednesday hosted by Bank of Pontiac at the Pontiac Elks. He noted South American corn production is quite an improvement over last year as the change in product represents 1.1 billion bushels.

“That will directly compete with us for exports,” Stutzman said.

Problems with South American crops last year helped our exports. Also, Mexico has been a big buyer of our corn. That could change with possible political tweaking of trade deals such as NAFTA. Stutzman believes this is something to watch moving forward.

“We’ve seen increased exports because of a lack of competition from Brazil.”

Several U.S. acres are expected to switch over to soybeans in 2017 and that includes Illinois. Stutzman said the corn market is going to do what it wants and fundamentally, it does not look like we are going to run out of corn. Brazil is likely to limit exports initially but could provide some pretty stiff competition by summer.

“We have had really good demand from a bean standpoint,” Stutzman added.

China’s soybean meal consumption continues to grow and farmers here grew a record bean crop last year. Stutzman foresees quite a bit of volatility in soybeans. Although prices could still go down, Stutzman won’t rule out seeing something higher than $10.00 down the road.

According to Stutzman, it is difficult to make a marketing decision if you don’t have a plan in place. He cautions against wasting time talking about what prices may do. Farmers should focus on what will hurt their operation.

“You need to learn the options and futures side of things as well,” Stutzman told the crowd.