The economics of supply and demand play a role in grain marketing, but marketing still can be viewed as much an art as it is science, said Curtis Goulding, of the Iowa-based Farmers Commodities Corporation, in a marketing education session at the recent wheat Industry and Expo in Las Vegas.

"The commodities market is not a static thing, where programmed tactics and formulas can predict pricing," said Goulding. "It's dynamic, with constantly changing variable dictated by what a lot of different individual people think will happen. Charts and data give some insight into pricing, but the process that really sets price is how buyers and sellers feel supply, demand, weather and politics work together to influence commodity availability. That human opinion element is what makes pricing volatile, almost like a human being."

Goulding doesn't think U.S. wheat acreage in the U.S. Department of Agriculture's March 31 prospective plantings report will decline as much as some analysts believe, with LDPs providing price support. He doesn't believe corn acreage will fall far from last year either at today's prices, while the loan rate will keep soybean acreage stable. The loan rate for oilseeds will continue to result in producers "farming the government, not the ground" in 2000, he said.

Some producers may turn to marketing their grain through livestock this year. "There's a strong feeling by some that the fat cattle market could move up to the $80 level, so that would turn $1.50 corn into some reasonable numbers."

Goulding said weather will become more of an issue as spring draws nearer. Grain markets are entering a 60-day window that could result in some of the highest prices this year. "The market is transitioning attention away from weather in South America to weather in the U.S., and the potential for problems may mean volatility and possible rallies." April may be the best time frame for wheat producers to make old and new crop sales, he said.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.