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Mike Zuzolo visits with Van Wert area farmers about grain markets

Is there still hope for marketing the grain in the bin?

As winter meeting season gets into full swing, Global Commodity Analytics’ Mike Zuzolo spent a few days in northwest Ohio this week to visit with growers about what to watch for in 2016, as far as the grain markets were concerned. Even though his message at one of the Mercer Landmark Winter Outlook meetings in Van Wert was future-focused, he still received many questions about 2015, including if there is any hope for the corn already in the bin.

“I think there is, but it all hinges on what happens in the crude oil market,” Zuzolo said. “If we can get a low in that market to stop the energy sector from worrying about the possibility of $10 crude, I think that will take a lot of pressure off of corn and soybeans. That’s really what I am looking for between now and the end of January.”

There is one thing that Zuzolo is figuring out as he travels across the Midwest and that is that acres are still completely up in the air at this point. Not surprisingly, the weather will continue to be a market mover as well.

“If the La Niña develops, it would probably put a bit more fear in the market that crop production could be shaved in the northern hemisphere,” Zuzolo said. “In 2015, it was all about the El Niño and a big crop and maybe the funds don’t want to press the sell side as much if the current weather pattern changes this year.”

One thing is for certain, farmers will need to get a little more creative in their marketing this year.

“You’re starting to see new specialty contracts come into play,” said Anna Kaverman, a grain originator with Mercer Landmark. “There has also been a bump in open orders, target orders and other non-traditional options to try to get the most from a marketing plan.”

After a short 2015 crop, basis levels in the Van Wert area have been very favorable, supported by the local feed and ethanol markets. Some farmer movement has caused that basis to fall recently. Local farmers are starting to sell more grain, not only because of basis, but in some cases simply to pay the bills.

“The sentiment is still a bit of doom and gloom here as farmers are coming off of a rough year where they had less bushels to market coupled with lower prices,” Kaverman said. “It’s hard to get excited about what is going on right now.”

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