It’s possible corn prices have hit the lowest level they’ll reach for the next few years, or they’ll reach that level soon, says Bill Biedermann, Allendale.
“The end user is the one that’s going to put the bottom in this and the farmer who says, ‘I’m not selling,’” Biedermann tells host Tyne Morgan on the “AgDay” Agribusiness Update segment for Tuesday, Feb. 2, 2016. “When we see that market confirm a bottom, which maybe we have, I think that’s going to be the bottom for years. I’m pretty excited about knowing what our risk is in the next couple years by what happens this year.”
That optimism remains despite the likelihood more acres of corn, soybeans and small grains will be in production during 2016 compared to this past year.
“We’ve got CRP acreage coming out, we’ve got the prevent plant and then we’ve got the lack of wheat acres that got planted,” Biedermann explains. “So we’ve got about 5 million acres that are going to go to something. Right now we’re allocating about 1 million to corn, a little bit more than that for beans and then the rest to different small grains and things like that.”
The silver lining to that added production is corn yields could fall back to the trendline, resulting in a slight decline in stocks as low as 1.6 billion bushels, he says.
“When it comes to a trader’s mindset, if stocks are flat—which they will be in corn—then the market just stabilizes and [stays] rangebound,” Biedermann says. “I think the downside gets kind of eliminated as far as the fear goes.”
Click the play button below to watch the complete interview with Biedermann on “AgDay.”