MARKETS Ohio’s Country Journal


DOUG TENNEY LEIST MERCANTILE


Managing the Market


This column is believed to be reliable and


includes the author’s opinions. Unforeseen and changing circumstances can change price out- looks and direction. Neither Ohio’s Country Journal or Tenney assume liability for their use. Doug Tenney is a licensed commodity broker. Copyright 2012, Doug Tenney, all rights reserved. E-mail address is dtenney@leistmercan- tile.com. Leist Mercantile specializes in marketing strategies and crop insurance coverage. Contact them at 1-800-231-6660. I thought I was going to have to give


Cindy CPR. On a recent Saturday morning I announced that I wanted to go shopping at Polaris. She soon realized that the attrac- tion was a trip to the Apple store to check out the new iPad HD. Normally, a mall has no more attraction for me than a wet spring has for producers. The March 15 crop insurance deadline


has passed. The revenue prices were $5.68 for corn and $12.55 for soybeans. Producers will now turn their focus to


BY TYHIGGINS, OHIO AG NET Trade will have a lot to gain throughout


2012 as deals with Panama, Columbia and South Korea are implemented. These agreements will add revenue upward of $3.1 billion to agricultural exports. That might make some wonder why these three agreements sat unattended in Washington for years. The answer to that question may be in some comments made by a former Mexican Embassy Ambassador as he talked about trade issues with the Ohio Farm Bureau County Presidents in March, calling the United States a bully when it comes to trade.


spring planting weather. They are just hoping that the great weather days of March will be repeated many times over during the next six weeks. Mid-March


resulted in some warm and humid days with new record daily highs reached in many locations across Ohio. It just makes you wonder if some pretty crazy weather days are ahead for the corn and soybean growing season. Already in March, we have heard of great corn planting progress taking place in Texas. Producers across Ohio and the Midwest used the month of March to fine-tune their equipment as they prepare for what some are already calling the fastest start to planting corn and soy- beans. We will know in just a few short weeks if it is a reality. Producers continue to watch grain


prices with much anticipation. There con- tinue to be numerous stories across the Midwest of ample unsold corn in the bins. Last summer, producers had a lot of opportunities to sell corn at seven dollars or higher. Many passed on that price as they felt at least $8 (or more) was just around the corner if they remained patient. To their chagrin, their patience is being severely tested. Much has been written about the lack of


farmers selling corn in 2012. There was even a Wall Street Journal article in February outlining what is taking place in


Is the United States a trade bully? Hector Cortez is Mexico’s


Agricultural Attaché and he compares the trade relationship between the United States and his country to a marriage. “My wife and I, like every married


couple, have issues that we deal with,” Cortez said. “What’s the alternative? The alternative would be such a huge issue that I do not want to even think about it. I would rather have issues and try to find a solution than to not have issues and not have a wife.” Cortez said the same goes with our neighborly relationship with the


farmers’ bins across the country. In past years, particularly during July and August, such an article often spelled the death and resultant highs of the crop detailed in the WSJ. It brought the traders who normally are absent from the market back to the forefront. Their often-misguided timing can bring financial stress because in the past, they have often been buyers near the tops when a market is often ready to peak and come back down. However, such a turn was not so pronounced with this par- ticular WSJ article. In mid-March, May CME corn was trading at $6.74 which has been the high so far for 2012. Soybeans have gone higher since late


January in spite of two supply and demand reports that indicate ending stocks are not in a threatening tight position. The latest USDA report in March estimated soybean ending stocks would be 275 mil- lion bushels when the 2011-12 marketing year ends on August 31. The price culprit took place in January when two weeks of dry weather and temperatures that often ranged from 105-110 degrees took place in both Brazil and Argentina. The high tem- peratures were much more common in Argentina, the second largest soybean pro- ducer in South America. Brazil continues to be number one in that region. The pat- tern of a severe soybean yield reduction in Argentina, which last took place during


country to the south. Since picking up the United States and moving it else- where is not an option, Cortez points out the need for the United States to be a bit more neighborly with regard to trade issues. Cortez mentioned President Obama’s


State of the Union address from earlier this year and how making trade “fair” with all of America’s trading partners is a high priority moving forward. “This means abiding by International


trade rules, but only when it is conven- ient for the United States,” Cortez said. “What I heard Obama say was that if


2008, appears to be manifesting itself again in early 2012. At this writing, traders are awaiting the


much-anticipated March 30 planting inten- tions report. In that report, USDA will detail 2012 US corn and soybean acres. Many are expecting corn acres to continue to move higher as the U.S. farmer’s love affair with corn continues to be strong. Traders are looking for corn acres to be 95 million acres while the soybean acres are about 75 million acres. For much of Ohio and the Midwest,


this past winter was extremely anemic as it lacked both snow and cold temper- atures. It is the winter that wasn’t. However, for bugs this spring will be the spring of, “Man, there are a bunch.” This will be a story line in the news in coming months. Don’t be surprised to see old corn and


new corn prices move in opposite direc- tions during the next six weeks. They are two different creatures. Old corn has tight supplies while new corn is staring at record acres in 2012. Some are already sug- gesting new December 2012 CME corn could reach $4.50 or lower this fall.


Thought for the day “Nobody knows the age of the human


race, but everybody agrees that it is old enough to know better.”


you want to play with me you are going to play by my rules. That is the policy of U.S. trade today.” Many of the OFBF County


Presidents expected to hear Cortez talk a good bit about NAFTA but were sur- prised when he took his talk in another direction, focusing on the Trans Pacific Partnership (TPP). The TPP is a multi- lateral free trade agreement that will enhance trade and investment among countries in the Asia-Pacific region. The agreement currently does not include Mexico.


continued on the next page Are You Prepared for Today’s Volatile Markets?


Call us today! Toll Free: 800-231-6660 133 Pinckney Street Circleville, Ohio


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Helping Ohio farmers manage risk since 1983. Ohio’s Country Journal • ocj.com • April 2012 •Markets 11


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