COVINGTON, Indiana – Agriculture could experience some volatility moving forward, but there is more optimism heading into the new season compared to years past.
That was the consensus of analysts at the All Day Ag Outlook Meeting on Tuesday, sponsored by Illinois Public Media at the Beef House. Presenters seemed to agree we are in a better position than we were last year, but they cautioned growers not to get too bullish.
There has been much interest in the soybean market lately as the soybean oil market led beans higher during a recent rally.
“Primarily because of the flow of money coming to the bean market from the speculative side, it’s been an interesting go,” explained Ellen Dearden of AgReview in Morton.
Dearden acknowledged soybean prices have not fallen apart just yet, but that could come this summer. Bill Mayer of Strategic Farm Marketing in Champaign believes two of the big factors currently include oil and how fast demand has grown.
“It’s been back and forth,” admits Pete Manhart of Bates Commodities in Normal.
According to Manhart, there is a big old crop of soybeans, we will likely have a bigger new crop and we are experiencing the biggest usage of all time. We may be in an unknown place for soybeans, but we know there are good supplies and great usage.
There are also many unknowns in the corn market. Balance sheets show an adequate supply but no one knows what the U.S. crop will be and it all boils down to weather.
“It does seem we are going to see a massive switch of acres from corn to soybeans,” said Dan Zwicker of Zwicker Consulting in Waco, Texas.
Zwicker isn’t too sure the market believes growers are switching away from corn. He believes the corn market will struggle, but a big drop in acres can change the balance sheet. Zwicker won’t rule out surpassing last year’s highs in corn prices.
“The better prices are going to be late summer or fall. I think, in the near term, prices are going to struggle.”
Wayne Nelson of L&M Commodities in New Market, Indiana feels the funds and fund money are moving the corn market. Mike Zuzolo with Global Commodity Analytics said for the first time in four years, wheat has less of a likelihood of pressuring the corn market.
“I feel like 2017 is a really big transition year politically,” Zuzolo explained.
Zuzolo also feels the U.S. dollar is more important this year than last.