By Sean Pratt
PHOENIX, Arizona — Bryce Knorr kicked off the 2015 commodity classic on a cheery note talking about corn and soybean markets.
“I have good news. I think there is hope for a rally,” said the senior grain market analyst with Farm Futures.
There have been nine times in the past 20 years where the corn stocks-to-use ratio is below 13 percent, which is what is forecast for the end of 2014-15.
In eight of those years the December new crop contract has rallied to take out the highs achieved in the fall. He is forecasting a minimum spring rally to $4.58 per bushel for corn.
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There have been 14 times in the past 20 years when the soybean stocks-to-use ratio has been below 15 percent like it is forecast to be at the end of this crop year.
In all 14 of those years the November new crop soybean contract has rallied to take out the fall highs. Knorr expects a minimum soybean price rally to $10.85.
Ed Usset, grain marketing specialist with the Center for Farm Financial Management at the University of Minnesota, agreed that a spring price rally is likely for corn and soybeans.
If the analysts are right that would bode well for all grain and oilseed crops.
Usset said over the last 35 years the December new crop corn contract has rallied to take out the December highs 70 percent of the time. The same is true for soybeans.
This year that would mean $4.39 corn and $10.29 soybeans. Usset said the higher prices are a function of the anxiety that comes with spring planting.
He said there is a 50 percent chance of achieving $4.60 corn and $11 soybeans.
There is a 14 percent chance that corn will rally all the way back to the $5.25 cost of production.
History says there is a 31 percent chance that soybeans will hit the $11.50 cost of production but Usset doesn’t put much faith in that forecast given the massive South American crop and the likelihood of bigger U.S. plantings.
HYBRID WHEAT
Syngenta is pleased with the progress of its hybrid wheat program. The company has been field testing the crop and hopes to have a commercial offering in 2019.
The company has already launched hybrid barley in the European Union and is using its experience with that cereal crop to help guide its hybrid wheat program.
Western Canada is one of the key markets the company will focus on when the product is ready for launch.
HIGH OLEIC SOYBEANS
The commercial launch of high oleic soybeans continues to be delayed due to a lack of global approvals.
Monsanto’s Vistive Gold soybeans are missing approval in Europe and China. The company expects approvals in both regions by the end of 2015.
Pioneer’s Plenish soybeans have approval everywhere but the European Union. It also anticipates full global approval by the end of the year.
Acreage of both varieties will be limited in 2015 with commercial ramp-up expected in 2016. That would be two full years after the companies initially intended to launch the products.
It is expected that high oleic soybeans will eventually account for 20 to 25 percent of total U.S. soybean acreage.
GM LABELING
The American Soybean Association says it’s time to appease consumers and allow for GM labeling … sort of.
The association says it would be too unwieldy to label all foods containing GM ingredients because that would be 99 percent of the food on grocery store shelves.
Instead, it will be pushing for voluntary USDA certification of non-GM foods.
That way, concerned consumers can find what they want while the system wouldn’t be too onerous for farmers and food companies.
Soybean growers also believe it is time for the U.S. government to devise and implement a low level presence policy for GM crops.
The association will also continue pushing for more rapid approval of GM traits around the world. Approval times in the U.S. have blossomed to three years.
ETHANOL RFS
The National Corn Growers Association has a new plan to boost ethanol consumption. The group has launched its Prime the Pump program, which will help fuel retailers pay for E15 infrastructure so they can blend 15 percent ethanol with regular fuel.
It will also continue its partnership with NASCAR, which has helped increase consumer awareness and acceptance of ethanol.
The group is committed to fending off the constant attacks on ethanol, including a bill announced today to repeal the Renewable Fuel Standard (RFS).
The association is also calling on the U.S. Environmental Protection Agency to issue its long-delayed final rule on the RFS volumes for 2014 and beyond.
sean.pratt@producer.com
You can follow Sean Pratts tweets from the Commodity Classic here: @sean_pratt
A view of the mountains from the conference centre at the Commodity Classic in Phoenix. #westcdnag #classic15 pic.twitter.com/bRYRtUWMLb
— Sean Pratt (@sean_pratt) February 26, 2015
