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My two cents

12/16/2011 @ 4:46pm

With all of this talk about Europe and whether a meeting or a summit will produce a debt crisis silver bullet, is your marketing head spinning yet? Mine is.

Because of so many negative outside factors, looking back on 2011 may be a lot more fun than looking ahead to the first quarter grain market outlook for 2012. 

For 2011, there is no other way to describe the grain and soybean markets except by saying they were phenomenal. Dec. 2011 corn futures prices hit a high of $7.80 per bushel in the month of August. The Nov. 2011 soybean contract traded near highs at $14.61 per bushel.

As we end the year, corn is $2.00 off its August high and the soybean market is $3.22 below its high.

In 2011, increased exports, record ethanol production and lower-than-expected yields all helped farm markets reach lofty levels. Yes, input prices, cash rent and farmland prices shot up as well. But, when you consider the farmers' risk management options, the year was simply phenomenal. 

Now, 2011 will also be known for the biggest debacle in risk management. Actually, make MF Global Inc.'s bankruptcy the eighth largest in U.S. history. The firm's lack of keeping customer and company money segregated may go on to be the catalyst for the biggest changes in commodities future trading ever. That statement will not be settled until 2012.  

What do you think of when you sit and recall this year? Is this a year you wish you could bottle up and keep around awhile? For most of the U.S. population, it seems like it would be hard for them to find few negative things to say about agriculture in 2011. 

I'm going to go out on a limb and offer this final thought on 2011. 

When many farm families look back on 2011, it could go down in history as the best year in farming. 

Looking Ahead

You'll notice in the illustration that accompanies this story, a farmer is trying to juggle a grain bin, a dollar sign, a barrel of crude oil, a barrel of ethanol, and a map of China.

Ironically, market gurus say all of these factors will take their turn dominating the grain and soybean markets in 2012.

Good luck juggling! Merry Christmas and Happy New Year!

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