FarmLead spoke with Naomi Blohm, a senior market adviser at Stewart-Peterson, to share her market outlook going into 2018. Here’s what she told us.
According to Blohm, there’s enough corn, wheat, and beans in the global market to go around. No increase in demand means no increase in prices. Instead, prices are stuck in the same trading patterns of the past year.
It would take a substantial factor to jump-start the markets. Meaning, the market outlook is looking stagnant.
In Blohm’s opinion, there are nine factors to watch. They include:
• Global supply and demand
• Political influences
• The U.S. dollar
• Energy markets
• Seasonal price patterns, and
• Fund activity in the futures market.
Any combination of these factors can “make the marketplace move.” Profit margins look thin for this year. So, it’s important to understand these factors and be “emotionally prepared” to make marketing decisions.
Blohm encourages to be more “diligent about pulling the trigger” for small profits. She also recommends producers hone in on their cost of production. This year more than ever, it’s important to be “honest with each facet of grain production” for each commodity.
This means focusing on the cost of production and what the cash markets are doing.
Blohm’s last advice implores farmers to remember that what worked last year for marketing grain won’t work this year. This is because “the fundamentals change from week to week, month to month, and year to year.”
A marketing plan made in January won’t be valid for the whole year. It must be tweaked week by week to be most successful.