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Five Themes Created by Market Volatility

January 26, 2011
By: Sara Schafer, Farm Journal Media Business and Crops Editor

Today, it’s hard to have a discussion about grain or ag markets and not use the word: volatility.

Sterling Liddell, vice president for Rabo AgriFinance, says many major factors are causing volatility and farmers should try to view these times as opportunities.
Currently, he says, foreign weather, external government policy and energy prices are all contributing to the uncertainty. 
Liddell says these five major themes have surfaced during these volatile times:
  • The supply and demand side of corn has change dramatically. It is more subject to policy from other countries, more than we’ve ever had in the past.
  • Margins are going to be squeezed and risk management needs to be used to address it.
  • Expect to see the price of inputs to increase with the price of commodities.
  • Fund money has come in stronger than it’s ever been. Fund money can enter and exit quickly.
  • At the moment, land values are going up. Commodity prices are strong, so they should keep land values up.
Liddell was the opening speaker at the 2011 Top Producer Seminar in Chicago, Ill.

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