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Taking Stock of the Market

Taking Stock of the Market

By Andrew Joseph, Farms.com

Maurizio (Moe) Agostino, Farms.com Chief Commodity Strategist spoke enthusiastically at the 2021 Great Ontario Yield Tour, discussing markets and climate to help farmers better manage their bottom line.  

The takeaway in a single sentence: be patient – except when it comes to purchasing fertilizer. 

For 2021 crop reporting, “I think the finish is not going as good as everyone thought it was going to be,” related Agostino. 

He pointed to the US ag areas of North and South Dakota, as well as Minnesota, noting that it was very dry early and that it has become worse. “And in the eastern corn belt it started wet, stayed wet and ended wet. I’m not now surprised to hear all the stories of disease like tar spot (Phyllachora maydis), which started in Illinois and spread like wildfire.”

There was also white mould (Sclerotinia sclerotiorum) in soybeans across the eastern and southern regions of the corn belt and in Ohio. 

Agostino believes the industry has over-estimated the crop because they only tell you about a crop’s potential. “In Ontario, corn crop at 191-1/2 is the potential—can it hold it? Here, we are worried about the dry weather. We’re worried about the kernel size and depth,” he noted. “I don’t know if we’re going to get what we had last year. I just don’t know if the kernel weight is going to be there.”

He said that in the U.S., it was too dry, had crazy heat, was too cold and too wet—getting more than one bad day of each, which can be devastating to a crop. “It means (the harvest) won’t live up to initial predictions made.”

Discussing the 89-year drought cycle, he suggested that every farmer “better wrap your heads around this because you’ve already left money on the table.”

Asking the Yield Tour audience, “How many of you guys sold $9 corn? – one person? How many of you sold $4 or $5 corn last September? – many.
“But,” Agostino continued, “if you had been patient—we (Farms.com) just sold our corn at $8.80.”

The drought cycle, he said, began its downward spiral six years ago and has become worse since. “It got bad this year, and it’s going to get worse next year. It’s Mother Nature, and you and I can’t stop it.”

Whether or not it’s because of climate change or increased GHG (greenhouse gas) emissions, the 89-year drought cycle is accurate in its prediction that it’s going to get dry, Agostino said. 

Hot Enough For Ya?

“In western Canada it was very dry. In mid-June, they got a heat dome. No one knew it was coming. No weathermen, no farmers,” said Agostino, though he acknowledged that he knew it was coming, but just couldn’t predict when. 

For western Canada it hit early in 2021, producing temperatures of 122°F (50°C), while in mid-August, the Russian Volga farming area hit a blistering 137°F (58.3°C).

As for Ontario, Agostino said it’s one of the best places to grow crops “because we really don’t get adverse weather. But it’s coming.”

He cited the areas of Dundas County and Chatham, where it was hit by crop-damaging hail, and 13-inches (330.2 mm) of rain in a week, respectively. In Iowa, an area there received 17-inches (431.8 mm) of rain in a single day. In Wisconsin, there was 100 mph (160 kph) winds, while another area got baseball-sized hail. Mother Nature isn’t happy. 

“What happened to (those farming areas) could happen to you, so be careful. Be more patient, and don’t pull the trigger too often.”

Pulling the trigger – IE selling too early—Agostino said that in western Canada, farmers pulled too hard early, and now don’t have the bushels to make their contracts.

Because of the adverse weather, farmers are coming in under what was predicted. He opined: “Don’t worry that beans will go back down to $4 or corn to $8. They won’t. They’ll be elevated for some time.”

When will weather patterns become less harsh? Agostino believes that Mother Nature will allow farmers to over-produce around 2026, when the 89-year drought cycle’s downward spiral will end and when selling prices will start to come back down.

Agostino was aghast that no more than one farmer at the speaking event had booked their 2022 fertilizer yet. “Good for you,” he exclaimed. “The rest of you—what are you waiting for? Do it now.”

He said there is a chance that fertilizer prices in the Spring of 2022 will reach the highs last seen in 2008, which will squeeze out all the profits from the farm. “Make sure you book your fertilizer purchases now.”

To view Agostino’s spectacular analysis of the ag market, see the video below. 




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Dave Bubeck, president of the National Association of Plant Breeders (NAPB) and research director for Corteva Agriscience, sits down to discuss the 2021 virtual meeting of the NAPB and how to sign up. The event takes place Aug. 15-19, 2021. For info visit napb2021.com.

The first plenary meeting on the schedule is the Meeting Kick Off on Monday, August 16th from 9:30-12 pm (Eastern Daylight Time – America/New York). If you can’t make it to the kick-off, don’t worry – that session, all the numbered sessions (1-8), and the awards session will be recorded and archived in the schedule to view later. The archived content will be available on the event platform for two weeks after the conference.

 

Comments (1)


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What everyone is forgetting; and does not understand, the farmer has the power to control the input costs. Nobody but nobody to organize them. Farming today, is legalized slavery.
Mel |Oct 5 2021 6:41PM