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Grain market makers & shakers
It's been a year unlike any other in many ways: Crops slammed by devastating drought, historically tight grain supplies around the world, arguably the most volatile grain markets U.S. farmers have ever seen, and questionable dealings among some of the world's largest grain brokers. Those are just a few.
See the latest on some of these topics and see how they're shaping your grain marketplace moving forward in these features from the upcoming Special Marketing Issue of Successful Farming magazine.
The most uniform characteristic of the 2012 crop was its jaw-dropping variability. Although some farmers face major financial setbacks, most yields fell short of worst-case scenarios. But fighting downed cornstalks, plugged combines, and harvest fires were only the initial hurdles. And now, will U.S. crop-quality issues have repercussions in global markets?
As producers finish in their fields, the futures industry is trying to find ways to fortify its system and earn back the confidence of the farmers, ranchers, and grain industry businesses for whom hedging is essential. And today, one year after the crisis of trust began with MF Global’s failure, there are signs that trust is still alive, and reforms and due diligence measures are taking root.
The U.S. has long supplied corn to China, but this year Beijing is looking at Ukraine, where production is expanding. This year, only slight growth is expected in China's feed demand and industrial corn processing, due to tight profit margins.
Since 1980, the corn ethanol industry has grown. The 2012-2013 marketing year will be the first time since calendar 1996 when production will fall. The ethanol growth that has driven corn prices is sputtering as it nears the maximum 15 billion gallons allowed under federal mandates by 2015.