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Market Analysis

Where will futures go in 2015?


Why is it so hard to predict where futures will go next year?

Largely, because, it’s impossible to predict what all U.S. farmers are going to do and what the weather will be like in the future.

  • Will farmers have time to complete fall tillage – they didn’t complete all of it last month
  • When will the fields be ready to plant – it was a late plant last year
  • What will farmers plant – many Iowa farmers are having trouble maintaining yields with corn on corn
  • What is the financial situation of farmers – there are rumors credit will be difficult for some farmers, they might plant more beans because of less input costs
  • Will the new farm program change planting intentions – farmers still don’t know which program is best for their operation yet


Ultimately it usually comes down to breakeven prices in the spring when the farmer has to put seed in the ground. 

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Planning for tough 2015 corn and soybean markets

Most of my clients are priced for all of their 2014 AND 2015 corn and soybean production. I’ve been urging them to be prepared for heavy supply and stagnant (if not falling) prices going into the 2014 harvest. All the experts are assuming U.S. farmers will produce about two billion bushels of corn above the 2014/2015 marketing-year demand (yearly demand averages around 12-13 billion). The market typically prefers when farmers produce only a billion bushels more than is needed, to “feel comfortable” one year to the next. Many also suspect the USDA will revise and increase last year’s total production number in the upcoming Sept. 30 report, which would put more pressure on prices to decrease.


This means 2015 demand needs to dramatically increase (say a 10% increase) to keep prices from falling. What could cause this to happen?

· Ethanol – It is currently already running at full capacity.

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