|
| What gets said makes no difference to where the market is going anyway. We all knew this point was coming and, based on life before 2008, seemed like it was going to happen much sooner (thankfully it didn't). It's a commodity that isn't the hardest thing to raise (try hogs if you need a point of reference) and there is lots of competition for the 'privilege' of raising it, so it's unlikely it doesn't stay very profitable for long stretches of time (we will bid it out).
On the other side of the equation, a commodity can come from anywhere and the cheapest source tends to win. This is part of the process of high and low prices 'fixing' themselves. We have no right to receive a higher price than someone is willing to pay since they just go somewhere else. Government supports can come in handy to keep us floating along while keeping food cheap and abundant, but we eventually pay for that also.
The take away from the last few years is that there have been some new players in the market with far more money than anyone else. Their fundamentals are not necessarily what we traditionally consider. Given that situation, prices can have very large price swings regardless of market conditions. Was corn ever 'worth' $8? No end user thought so, but the big money kept buying and it hit $8. Is the DJ average really worth 17000? Given the economic conditions - if you are working, it's generally for less and companies (which really are not flush with cash) are not interested in new ventures in this regulatory environment (especially small/med business). I would say the DJ is big money playing the market just like it was in corn.
So, it's likely there will be opportunities to price grains at better levels, but predicting when that will happen will be a challenge if we are still just looking at our own fundamentals.
Edit: ok livestock only guys are probably dancing a jig right now.
Edited by Pat H 9/22/2014 07:04
| |
|
For those you rooting for $2 corm and $6 beans.
