A ‘new normal’ in grain markets

A leading ag economist says there’s a new normal in grain markets that is seen especially in corn.

Arlan Suderman, chief commodities economist with I-N-T-L F-C-Stone, says what has stayed the same is markets continuing to do their job, “Demand is good in the world. And, I think it’s strong. But, it’s just not coming to us. So, if we’re going to build demand that means a cheaper dollars so that we can compete on the global market better. Unfortunately, I’m not optimistic about getting the dollar cheaper in the near-term.”

Overall, he tells Brownfield, economic problems in Japan and Europe and elsewhere are going to keep the dollar strong. Looking for alternative uses, Suderman says, will be just a part of the solution moving forward, “Ethanol demand looks good. It remains solid but its growth opportunities are past us now, it looks like. Feed demand certainly looks to be increasing as we build the cattle herd once again, as we expand hog production and poultry production. But, we need greater demand than that.”

Suderman says the new normal is more volatility: Lower prices in times of surplus and higher prices during short crops. Suderman says growers must sharpen their pencils and if ever there was a time to work with a risk management partner that time is now.

AUDIO: Interview with Arlan Suderman