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Keep things relative

Agriculture.com Staff 02/11/2016 @ 7:01am

Agricultural markets continue to exhibit extreme volatility.

The question is whether this market movement will be the norm in the future. We doubt it. From a historical perspective, this is an extreme year, and over time the market will likely exhibit a calmer environment. However, for this year, look for volatility to remain high, as uncertainty over the crops and economic conditions keep hedgers and traders on edge.

Yet, it is important to keep things relative. This week many farmers feel remiss that they have not been more aggressive sellers. They felt just the opposite two weeks ago. Markets correct, and when they do, you still have to make a decision whether or not to sell. In other words, you cannot cry over spilled milk, but you still measure the value of the commodity and what this means to your bottom line.

As an example, this week when December corn slid through $5.50 on its way to $5.21-1/4, the low from Thursday, many producers we talked to felt as though they missed their chance to sell. On the other hand, if you keep a $5.21 price in perspective, this is record high in comparison to all other years. In addition, if the market were moving upward this week and $5.21 was a new contract high, you would probably be pretty happy.

Volatility is likely to remain high. If you missed a selling opportunity, you may get a second chance. The key is being strategic and having your orders in place to sell if the market provides you the opportunity.

If you have questions or comments, contact Bryan Doherty at Top Farmer at 1-800-TOP-FARM ext. 129.

Agricultural markets continue to exhibit extreme volatility.

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