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Market Outlook, December 2010

December 1, 2010

Advisers Launch 2011 Sales

Prior to the October price spike, only a few marketing advisers had priced half or more of the corn and soybean crops. The values of hedged-to-arrive contracts, hedges and options positions, as well as cash sales, are reflected in the Market Value columns below. For the breakout of cash, futures and options, click the Marketing tab above.

The prospects are for price to continue to improve in the corn sector, says Dan Manternach of Doane’s Agricultural Report. “When USDA lowers the [corn] yield in October, there is a strong tendency for them to cut the national yield an additional bushel or two in November. We expect to add to 2010 crop sales and begin pricing the 2011 crop,” he says.

For soybeans, USDA reduced crush numbers, making exports the story for that crop. The October report placed exports at 1.52 billion bushels, breaking the previous record of 1.498 billion bushels for the 2009 crop.

“We have advised pricing the first 10% of 2011 production when November futures top $10.50,” Manternach says.

Key Market Factors
> Use rationing as required
> More acres of everything needed in 2011
> Exports rely on cheap dollar
> Focus on profits

Click here for Adviser Track Record Table

More Droughts

The percentage of the world’s land subject to serious drought has more than doubled since the 1970s. That will dramatically worsen in the next 20 years, according to a study by Aiguo Dai of the National Center for Atmospheric Research. “Most of the western two-thirds of the U.S. will be significantly drier by the 2030s,” he says. The world can ill afford such a development as food demand grows.

Sales Strategies for 2010 Corn

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FEATURED IN: Top Producer - December 2010

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