The holiday parties are over and many of us have already broken most of our New Year’s resolutions. It’s time to get down to the basics of developing marketing plans for 2012 and 2013. I have to tell you that now, more than ever, there is serious risk potential in front of us.
I assume most producers are in rather good financial shape right now. The strong prices we’ve had from 2007 through today have helped to stabilize the bottom line. The problem is that just about every item used to produce grain has increased the cost of production. I sense that many are also increasing living costs.
Producers are fixed on $7 to $8 corn and $13 to $15 soybeans, and they have no plan in place for the downside. A two-season price action close to or below the cost of production on fall lows would put a serious financial dent in everyone’s ability to weather the bearish storm.
I have written it in the past and you will read it again today: I’m proud to be a bear! While there are times that bears have to hibernate, it is getting very close to a time when bears can feast on those fattened-up bulls.