Lack of USDA Data Hinders Forecasters
Published: Friday, January 18, 2019
Panelists at the grain market outlook seminar Tuesday morning at the Fort Wayne Farm Show discussed a number of factors that could shape corn and soybean prices in 2019. The seminar kicked off the educational events at the 30th annual Fort Wayne Farm Show, running through Thursday.
Rob Winters, farm director for NewsTalk 1190-WOWO, explained that trying to predict future market prices has only grown more difficult through the years.
"We cannot look at it the way we used to in the old days, about what are the fundamentals this week," he said. He went on to mention the partial U.S. government shutdown, African swine fever's effects on hogs in China and ongoing discussions about U.S. trade agreements.
"A lot of moving parts are happening," he said. "It's kind of like trying to nail Jello to the wall."
Panelists Jon Cavanaugh, marketing director for Central States Enterprises Inc., and David Kohli, adjunct professor for Ivy Tech Northeast Indiana, said that they were missing some key data because of the government shutdown, including the U.S. Department of Agriculture's World Agricultural Supply and Demand Estimates.
With the information they do have available, Cavanaugh said, "I am somewhat optimistic about corn prices."
Acreage in corn is expected to increase by between 2 and 3 million acres in 2019, he said. If that does happen and corn production meets demand, the price will stay about what it is now, he told the audience, but if it doesn't, or if there is inclement weather anywhere, he predicts prices could go above $5 per bushel.
Cavanaugh also explained that the U.S. remains the global leader in corn production as opposed to other commodity crops. Russia and Ukraine have largely taken over the world's wheat production, he said, while South America, especially Brazil and Argentina, have become soybean leaders. A drought in Argentina, though, also caused the country to become the largest importer of U.S. soybeans in 2018, Cavanaugh said, while China, which had previously been the largest buyer, has moved its purchasing to Brazil.
Ryan Martin, chief meteorologist with Hoosier Ag Today, wrapped up the seminar with positive news for area farmers.
Martin said that he expects below normal temperatures in the Midwest for the remainder of January, even possibly "bitterly cold." He predicted a drier March with normal temperatures and warmer than usual temperatures in April. He expects precipitation to be about normal or just below average in April and May.
"This actually says we should be able to get out of the gate OK for the most part in 2019, when it comes to getting in the field and getting something done," he said.
Farmer Steve Shrenk traveled to the Fort Wayne Farm Show from Antwerp, Ohio, where he grows corn, wheat and soybeans and raises a variety of livestock. He was especially interested to hear the grain market outlook.
The speakers presented about what he expected, he said, but even so he appreciated the panelists' perspectives, especially the weather outlook.
"It's always nice to see the grain market outlook," he said. "This is the most beneficial meeting the farm show puts on."
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