Published on: 08:59AM Aug 25, 2008
I’ve got to admit it—it’s kind of fun talking to grain marketing specialists these days. They’ve got nothing but good news. And Mike Woolverton from Kansas State University is no exception. You ought to hear what he’s saying about soybeans! And corn. And wheat.
In brief, he’s looking for strong wheat markets through this fall and winter. Corn will also be strong and will go back and test the summer highs. And for soybeans, it’s a run for your life situation—nobody knows how high they’ll go.
Just back from USDA’s Outlook Conference, Mike has a lot of fresh information. For instance, guys up in North Dakota, Minnesota and Wisconsin are saying the corn just flat isn’t going to make it. “It’ll run headlong into problems with frost.
“In addition, though, it’s dry not only in the eastern Corn Belt, but the entire Corn Belt. As a result, corn prices will continue to go up. The harvest lows are already over—and we haven’t even gotten to harvest yet!” Woolverton says.
Mike says everybody is wondering where USDA got it’s estimates. But wherever they got them, they’re going to have to change them—and of course, they’ll go down.
All in all, corn prices are headed back up. He says they’ll make a run at the $8 highs. They may not make it, but the ride will be thrilling.
Soybean prices are going through the roof. “The crop is way behind and we have a low carryover. In addition, there was less expansion in Brazil.”
And as far as wheat goes, Mike is again bullish. “We have a shortage of good quality milling wheat. It’s dry in Australia and even drier in Argentina…..plus they’re also having trouble with cold weather there—temps in the teens while jointing.”
Woolverton says there is a huge basis on soft winter wheat. “No one wants to store it as they need the bins for corn. So we could see a lot of this ending up as feed wheat.”
Longer term, Mike isn’t expecting a collapse in the grain markets any time soon. “It would take two super sized crop years to cause that to happen, and the odds are just against it. Too, we’re seeing some other interesting things out there like South American farmers cutting back on fertilizer.
“And here in the US, the ethanol thing just won’t go away. EPA is fully committed to ethanol. True, we have fewer plants being built but existing plants are here for the duration. Ethanol may not be THE solution, but it’s certainly part of it. Thus, it’ll provide a solid base of demand.
“But while grain prices will remain a lot higher than in the past, there will be wide fluctuation,” he concludes.
And finally, your words of wisdom for the day. Some years ago we were on campus at Purdue University and one of the ag economists I was talking with—if I remember right, it was Mike Boehlje—explained to me how to easily catch chickens. Rather than try to run them down, you simply wait until they go to the barn to roost at night. Then, while sleeping, it’s as simple as picking apples off a tree. We tried that several weeks ago on some extra roosters we had that a neighbor wanted—and it works like a charm!