The futures market was the topic of the HAT seminar at the Indiana/Illinois Farm Show on Thursday. Presenters Jim Riley, Tom Fritz, and Mike Silver were in agreement that corn and soybean markets in 2015 will not look anything like they did in 2014. Fritz said he sees corn prices ranging from the upper $3 range to no more than $4.50, “It is not that we don’t have demand; we do. Our livestock numbers and growing and the ethanol industry is profitable, but I have never seen a strong market powered by domestic demand alone.” He said export demand will be good in 2015, but not good enough to move the market much higher than it currently is, “US export sales will be good. I expect we will see a pickup in January when Brazil stops shipping corn to the world market. But, the reality is, we have enough supply to meet the demand.” Fritz added, with the current carryover, the market will not need to buy corn acres in 2015.
In the case of soybeans, Fritz said a possible record Brazilian crop could send prices tumbling, “It is scary — I am really scared. If the Brazilian crop is as good as some are predicting, we could see soybean prices fall sharply.” He said seeing contracts in the $8 range would not be out of the question. Both Riley and Silver see a soybean top of $11 in 2015 but would not speculate on how low soybeans could go.
Mike Silver, with Kokomo Grain, said continuing transportation problems and a profitable ethanol sector will keep Indiana cash prices steady in 2015. Jim Riley said he does not expect another record crop in the coming year, “My experience is that we do not have record crops in consecutive years.” He speculated that growers might cut back on seed and fertilizer inputs as profit margins tighten in 2015. He also said many fields in Indiana suffered serious compaction because of the wet harvest which would reduce yields in 2015.
All three agreed that the low is in for the 2014 crop and warned that storing a large part of the crop may not be a good strategy. “There is not a lot of carry in the market right now,” said Silver. He urged growers to look for opportunities to sell on price rallies.