The big question farmers will be asking in 2016 is “Where will corn and soybean prices go?” The big question the market will be asking is “What will producers plant in 2016?” As for where prices will head, the amount of grain in the world would suggest more downward pressure on prices. Arlan Suderman, with FC Stone, says it will take a weather problem someplace in the world to give us a rally, “The two best opportunities for that to happen are in South America in February or the Midwest in July.” He said the Brazilian corn crop will be in critical late development beginning in February and dryness could cut yields. In addition, a weather problem in the Corn Belt during pollination could boost prices as it did this past July.
As for what the US crop mix will be in 2016, Suderman says farmers may be forced to change their plans by their bankers, “I had originally been thinking farmers would plant more corn, as much as 2 million acres more corn, but I have had to revise that.” He told HAT credit issues for many growers may put them in a position to plant soybeans, “I am now keeping my corn acre predictions flat for 2016 and looking for a 1 to 2 million acre increase in soybean planting.”
Arlan Suderman and the other members of our market analysis team will be with us in 2016 to provide you with the market insights and perspectives you need each day.