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Central Missouri | AGtrader has given us alot to think about. I do know that the bullish concensus is above 90 for about 4 weeks now. If it wasn't a demand driven mkt this thing would have corrected already. There hasn't been a correction because each time the market tries to someone feels it is a good value and buys it. That alone is an indication of a very strong market. The key is how long will the demand last? As far as input costs: oil is gonna be alot higher next year than this unless there is a worldwide recession. We know that seed is gonna be steady to alot higher. The seed corn producers are negotiating contracts now and the growers are getting more because their alternatives look so good. We know what pesticide prices are doing. As long as inflation continues, our inputs are headed higher because cost of production for the input companies is headed higher. We know what machinery costs are doing. We know what fert costs are doing and as long as fuel goes up and as long as china/russia/S.A. demand continues fert prices are going to increase. All that said, our costs don't have alot to do with the price of soys/corn/wheat. What does have alot to do with it is demand and that is the driver today. When will this slow? When the world has a better crop and or the value of the dollar goes up.
One interesting note: In the last 27 years there has never been a front month high in soybeans in the months of dec,jan,feb, or mar. Being we are in dec now and the front month Jan contract is at a contract high if this statistic holds true we will see higher prices than this sometime after mar by the may, july, or aug contract.
I rambled alot but one thing is for sure I will read Agtraders post alot the next months so that I make sure and consider the other side of the story. | |
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AGtrader what has been your position??
