Dad and I received our annual meal of knowledge last week at the Beef House near Covington, Indiana.
The All Day Ag Outlook meeting hosted by Illinois Public Media was another hit. The crowd was decent and the food wasn’t bad either. Aside from enjoying those delicious Beef House rolls, we learned about the markets from a number of speakers.
The cash grain panel discussion told us there is plenty of risk out there – especially on the soybean side which means farmers need to be proactive. Our country has plenty of soybeans on hand and these aren’t going to disappear all at once.
“You’ve got to be cautious,” said Matt Bennett with AgMarket.net.
Soybean basis hasn’t been so rosy but corn basis has been decent, according to Bennett. The time to see a bump in basis is when farmers prepare to go to the field. We have seen plenty of volatility in both corn and soybeans.
“We have to look at low volatility environments as a plus if you want to use options,” explained Ellen Dearden with AgReview of Morton.
Bill Gentry with Risk Management Commodities suggested making good sales early in the year. Now could be a reasonable pricing opportunity for soybeans.
“Prices probably are going to fall out of bed,” Gentry explained.
Jacquie Voeks with Stewart Peterson in Hollister, Missouri reminded the audience that when we lose a market such as China, it can take a long time to come back.
“It’s going to be a long haul,” she admitted.
Voeks believes price swings are narrow because volatility is low. This means we shouldn’t expect any gifts from the futures market. Pete Manhart with Bates Commodities feels it is important to protect the downside due to what may happen in the future. He has heard horror stories of the low $8.00 range on soybeans.
Temperatures are typically in the 40s and the sun is shining on our car ride to Indiana, but not this year. We left home when temperatures were in the single digits and snowflakes were pouring out of the sky. It certainly felt more like early January.
(The View from the Cab is powered each week by Petersen Motors in Fairbury)