With commodity prices strong for virtually all crops and market volatility that’s on steroids, look for wheat, corn, soybeans, cotton, sorghum and other crops throwing their hats in the ring for acreage. It could rival a cage match before it’s settled.
The battle royal for acres will hit its peak next spring, when growers and their seed suppliers frantically decide which direction to turn. “Rarely have we seen a fledgling bull market in all of those commodities at the same time,” said Jim Wiesemeyer, Informa Economics, at last week’s Amarillo, TX, Farm Show commodity forum. “That translates to very volatile markets.”
That volatility erupted again last week when wheat, corn and beans shot up after a few weeks of being in the doldrums. Chicago and Kansas City wheat prices rebounded by about $1/bu. from mid-November slumps. Chicago March wheat closed above $7.50/bu. on Thursday, while Kansas City March closed at above $8. Corn and beans saw similar rallies, with Chicago December and March corn rallying up 30-40¢ to above $5.50/bu. January and March Chicago soybeans were again eyeing the $13/bu. range, closing Thursday at near $12.80.
Wiesemeyer said that with the bull markets, growers “are no longer price takers” and have some bargaining strength in more markets and demand, both domestically and through exports. He warned growers that, with the volatility, prices can also retract on a whim. So when new-crop prices are at a profit, remember “you can’t go broke making money.”
Still, his optimism should have growers gleaming. “I’ve never seen the outlook (for commodities) so good – and it’s going to continue,” he said.