Analyst: Don't Let Long-Term Weather Forecasts Rule Markets

January 4, 2017 12:56 PM

Lessons were learned in 2017, and one of the most important lessons, according to Ted Seifried of Zaner Ag Hedge, was to be cautious of long-term weather forecasts. 

“We can’t put a whole lot of faith in longer-term models,” said Seifried. “When weathermen call out specific pricing, you have to take that with a major grain of salt because long-term forecast models can be very deceiving.”

Seifried said there’s a lot more factors that determine commodity pricing than the weather.

Brian Splitt of Allendale, Inc. said when a bold forecast calling for unusually high corn or soybean prices, it serves as a reminder that “severe circumstances as far as weather goes to achieve those prices.”

“You need to put yourself in a position to be able to sell at levels that you are profitable on an average crop and still be able to capture upside potential,” said Splitt. “It’s going to make it a lot easier to sleep at night.”

Watch Seifried and Splitt discuss ways to keep upside potential in soybeans and the benefits of owning calls on U.S. Farm Report above.

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