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Market Outlook Warns Of Overproduction

The senior market analyst with FarmLink Marketing Solutions says farmers have had to work harder over the past couple of marketing years.
Neil Townsend notes in the past, high prices seemed to always have been there, adding this has not been the case recently.
He presented his 2018 market outlook last week at St Jean Farm Days.
"We think that prices are going to kind of struggle to maintain momentum if they start to go up. There's just a lot of crops around in the world, big supplies of wheat, corn and soybeans and those are going to keep the pressure on prices if they try to increase. That being said, we don't really see further declines because there's just enough of a weather threat say in North America to keep it a little bit honest."
His biggest concern moving forward is the lack of any real incremental demand.
"The job of a marketplace is to clear, and that means to find a price that puts stock levels in a manageable range. Right now we've been building stocks over the last few years and the stocks are getting rather burdensome. Typical behavior is, you find the high cost producer and you put him out of business. I don't think we're at that point right now, or at least nobody thinks they're the high cost producer because every farmer, everywhere around the world is continuing to produce, continuing to plant fence post to fence post."
Source : Steinbachonline