While the U.S. Environmental Protection Agency has proposed cutting the mandate for renewable fuels such as ethanol, that might be a moot point for 2014, experts tell the U.S. Farm Report Market Roundtable.
"It’s a little unclear whether that means anything firm for the market," says Bryce Knorr, senior editor, Farm Futures magazine. The decision as to whether to proceed lies with the Obama administration, he says, and ethanol margins are good with production plants up and running.
Too, livestock margins have become more profitable and there’s a big supply of corn, says Chip Nellinger, principal, Blue Reef Agri-Marketing. Producers are still making money.
"That fuel versus food debate should kind of go by the wayside," Nellinger notes. Knorr adds that only a small portion of the corn kernel can be used to make ethanol, a fact that is sometimes overlooked.
There’s also opportunity to be found in the commodities market, despite an overall decline in interest. Corn and cotton are both at three-year lows, Nellinger says.
"The long-only index funds have had kind of a bad run of returns here," he explains. As a result, some have turned to the stock market, which is experiencing all-time highs.
Nonetheless, speculators will continue to play in the commodities market, and farmers can access the online market around the clock.
"Anytime a farmer wants to sell anytime of the day or night, he can sell," providing liquidity for the market, Knorr says.
Click the play button below to watch the Market Roundtable on U.S. Farm Report: