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Monday, January 29, 2018 8:19:33 PM
With Planting Season Coming Many Farmers Are Faced With A Choice
https://seekingalpha.com/article/4140602-planting-season-coming-many-farmers-faced-choice
Summary
Each year is a new adventure in agricultural markets.
Five straight years of bumper crops but the dollar is helping.
The planting decision- The corn-soybean ratio.
What to watch for in the weeks and months ahead.
Right now, look for more bean planting, but that could change.
Those who read my pieces on Seeking Alpha know that a recurring theme in my analysis of commodities markets is how I define the terms cheap and expensive. I believe that the determination of whether a raw material price is under or over values has little to do with its nominal price.
To me, these terms can only be applied to a commodity when one compares the price over a period of history with another raw material that can serve as a substitute for consumers or when a producer has a choice when it comes to output.
History tends to repeat itself in markets, and consumers and producers are economic animals. Shoppers tend to make wise economic decisions choosing products that cost less than alternatives. On the other hand, producers tend to concentrate their efforts on products that offer better returns. In the world of agricultural commodities, we are coming to a critical time of year when farmers will decide which crops will optimize the return on their acreage. In many parts of the United States, agricultural producers are now watching price action like hawks as they have a choice of planting corn or soybeans on their land. The United States is the world’s leading producer of both crops, and it is the price relationship between the grain and oilseed that determines many farmer’s behavior each year.
Each year is a new adventure in agricultural markets
Since 1960 when there were approximately three billion inhabitants of our planet, the population has more than doubled. Most recently 7.449 billion people live on the earth. At the same time, standards of living have improved dramatically. In the world’s most populous nation China, President Xi recently told his party congress last October that the country will expand the size of the middle class over coming decades. Meanwhile, more people with more money require more food each year.
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