top of page

Downside risk is there

Dale Durchholz of Grain Cycles addresses farmers in Pontiac on Friday.

PONTIAC – Dale Durchholz of Grain Cycles sees some weakness along the way in commodity prices.

During Friday’s Agronomy Day from the Livingston County Farm Bureau, Durchholz said the big thing he really worries about is the 27-year low due as we get into 2026, even though we could have a rebound in crop prices.

“I see some problems still building in the whole mix,” explained Durchholz.

He feels the dollar will stay strong until we get a different administration and long-term stock cycles suggest problems in the late 2020s. Though he isn’t sure why, Durchholz still sees trouble on the horizon long term which is why he encourages producers to be prepared.

In the long haul, Durchholz believes money will come from investment bearing instruments.

With planting on everyone’s mind looking ahead to the 2023 growing season, Durchholz recommends paying close attention to production numbers as it is too far away from the new crop year to really pay close attention to demand information. S&P Global is looking at over 90 million acres of corn planted and 88 million acres of soybeans. USDA’s Ag Outlook forum is coming in the couple of weeks.

Some supply will start to roll back into the pipeline as we move forward, according to Durchholz. He sees a pickup in the corn export business even though Brazil continues to export corn, but they will be in a situation where they’ll have to maintain it.

“I think we’ll see a bit of a bubble in the market,” adds Durchholz.

Soybean oil exports are dismal compared to last year and in terms of beans, the whole world is going south.

“We are not shipping any bean oil out of the country.”

Harvest in Brazil is half of the normal pace and there is a big flood that will start going into the pipelines in late February or early March. Durchholz hears farmers in South America are behind on sales and he is worried about our export levels going down like they were in 2021.

Durchholz has a 32-week low coming at the end of May for beans as he does not feel we will see the spring bump we have seen.

“The trend is going to turn south pretty hard,” said Durchholz.

For corn, Durchholz doesn’t have any big lows until we get to 2026 or around that time. The corn market still has life in it but he doesn’t see it past $7. If we get below $6.50, the trend could turn weaker. Good corn yields are possible for the coming year with La Nina ending and fewer probabilities of weather problems in the summer.

“I’ll still give this market a little bit of time,” noted Durchholz.

Growers should keep their eye on the wheat market to give an indication of what corn may do. An important factor will be what conditions are like when the wheat starts to come out of dormancy. Durchholz has a nine-year low coming in wheat this summer so wheat could be weak.

More discipline will be necessary in how crops are marketed. Durchholz compares where we are at today to 1983 before we hit the real “bloodbath” in 1987.

“You need to control your greed and fear when you’re going to be a trader or marketer.”


Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Classic
  • Twitter Classic
  • Google Classic
bottom of page