December 8, 2010 Strong Market Will Prompt Acreage War
Larry Stalcup, eWheat editor noted this week that With commodity prices strong for virtually all crops and market volatility that’s on steroids, he looks for wheat, corn, soybeans, cotton, sorghum and other crops throwing their hats in the ring for acreage. It could rival a cage match before it’s settled.
The battle royal for acres will hit its peak next spring, when growers and their seed suppliers frantically decide which direction to turn.
Market volatility erupted again last week when wheat, corn and beans shot up after a few weeks of being in the doldrums. Chicago and Kansas City wheat prices rebounded by about $1/bu. from mid-November slumps. Chicago March wheat closed above $7.50/bu. on Thursday, while Kansas City March closed at above $8. Corn and beans saw similar rallies, with Chicago December and March corn rallying up 30-40¢ to above $5.50/bu. January and March Chicago soybeans were again eyeing the $13/bu. range, closing Thursday at near $12.80.
Producers need to remember that, with the volatility, prices can also retract on a whim. So when new-crop prices are at a profit, remember “you can’t go broke making money.”
Most of us have never seen the outlook look so good on the marketing side of commodities.