~~Sufficient Supply and weak demand.~~Weather throughout the Midwest has been negative toward price and positive towards harvest and after harvest field work. This year many were able to work their fields in preparation for spring planting. If there is a cool wet spring throughout the Midwest many producers will still be able to get their 2016 crop planted early. The implication being with much of the 2015 crop still in the bins unpriced, any spring rally could be short lived due to producer selling. 2016 is setting itself up for a difficult at best marketing year with many fundamentals weighing down on any upward price trend. Bottom line: There is too much supply and the only way to go through too much supply is lower prices. Everyone knows it and senses what is coming. The strength in the Dollar index is also not helping and will continue to hurt any future exports in the grains.
With harvest over and the holidays approaching, it is time to ask questions, go over your figures, and talk to your marketing advisors. If you do not like the one you have, find a new one but decide now what strategies will be implemented next year. If there are strategies that are confusing have someone explain them to you. Use all the resources out there to make the best marketing decisions because 2016 is shaping up to be a difficult marketing year if a weather event or an increase in demand is not seen.
If anyone feels they need to put structure into their risk management program and would like to discuss marketing strategies, call Bob or Laura (1-800-832-1488). If you have questions, we welcome emails to [email protected] or [email protected].
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