Another 2007 for prices?
BLOOMINGTON – With higher prices over the past several months, there has been plenty of talk over whether commodities are embarking on a new super cycle higher move.
“I don’t think we are there yet,” Dale Durchholz with Grain Cycles told The Central Illinois Farm Network on Monday.
We saw big moves higher in 2007-2008 and in the 1970s. For the next three to five years, Durchholz feels commodity prices could be higher and better than they had been in the last four to five years with no major move to higher levels.
“When you get to levels like $14.00 beans and $5.00 plus corn, you’ve got to understand you are looking at some pretty lucrative levels here.”
This could be the time to make some marketing decisions if you haven’t already. Durchholz has a trust farm and does not own any 2020 corn or soybeans. He has priced about a third of his 2021 crop on both. While some are holding on to old crop, Durchholz advises against holding more than 20 percent of a crop.
“I would start dipping my toe into some new crop sales at this point because in the history of things, these are attractive price levels to start taking advantage of,” he said.
In fact, if these are your first and worst sales, they are not a bad place to start.
Durchholz reminds producers South America is early into the harvest of what will be a seven billion bushel soybean crop. That is looking at the four major countries there, not just Brazil. Also, keep an eye on Russia as the weather turned really cold last week although there was no major winter kill due to snow cover.
“It is always important to keep on top of what’s going on over there,” Durchholz noted.
Here at home, farmers tend to look closely at the drought monitor but Durchholz often watches soil moisture levels in the U.S. through early spring. This information indicates whether soil moisture is above or below normal and what areas to monitor as another season looms.