Thats why fertilizer producers are still the number one performing sector on global stockmarkets ... despite 99.9% of hotcopperites still having no exposure at all? How could this be?
------------------------------------------------ Rising grain prices may be trend, not spike By Keith Rydberg/Daily Sun staff writer Thursday, Nov 29, 2007 - 10:34:55 am CST
While theories as to the reason for high grain prices and predictions as to how long the trend will last vary, those who regularly watch the grain markets are noticing the effects the price hike is having locally and across the nation. *
As of Thursday, bushel grain prices throughout southeast Nebraska ranged from $3.66 to $3.73 for corn, $9.97 to $10.05 for soybeans, $8.46 to $8.48 for wheat and $3.77 to $3.80 for milo.
At area grain elevators, managers said the spike in grain prices is causing farmers to take a “wait-and-see� approach before bringing their corn, soybeans, wheat and milo to town.
“When we started to have high prices a year ago, farmers were almost selling grain straight from their combines,� said Monty Johnson, manager of the Southeast Nebraska Cooperative in Beatrice.
“Now that we are in the second year of these prices, they are not selling as fast as they were last year. I think everybody is just accustomed to the prices now and they are hoping for the potential of the prices going even higher.�
Dailan Meints, branch manager of the Farmers Cooperative in Adams, said he has noticed a similar trend at his elevator. He said many farmers around the Adams area are keeping their grain in storage bins on their farms in hopes of higher grain prices and to avoid paying storage costs at elevators.
Meints also said several farmers who sold their grain early last year found themselves taking a heavy loss later in the season.
“Last year, many farmers around here contracted ahead on their corn and sold it when corn was only $2 per bushel,� Meints said. “By the time they brought it in, the market price was much higher.�
While recent interest in ethanol and biodiesel fuels and the passage of the Renewable Fuels Standard has been attributed for the increase in corn and soybean prices, Don Hutchens, executive director of the Nebraska Corn Board, said this increase has caused a ripple effect in other grains as well.
Hutchens explained the increased demand for corn and soybeans for fuel production has resulted in higher prices of those grains. As a result, many farmers have planted more acres in corn and soybeans while planting fewer amounts of such grains as wheat and milo. To compensate, Hutchens said the price of those grains were increased as well to provide an incentive for farmers to continue planting all grains while also getting new farmers to plant those grains as well.
“I think there are a number of smiles on producers’ faces these days,� Hutchens said.
“I believe we are really seeing the start of a new era with these prices and that this is more than just a price spike. On the international level, we are seeing a stronger, more long-term demand for corn from several countries. On a state level, no other state is really better than Nebraska in having the ability to process corn into ethanol and distiller’s grains.
“There is also starting to be a strong interest in renewable fuel sources. Because fossil fuels are finite, people are starting to realize that we all have to find alternative fuel sources.�
Royce Schaneman, executive director for the Nebraska Wheat Board, agreed with Hutchens and said along with the financial incentives being made to keep wheat production at current levels in Nebraska, low wheat yields in the past two years have also resulted in high prices.
“There’s an old saying that a rising tide raises all ships and I think that this is what is happening here,� Schaneman said. “In some ways, this is really a correction of sorts to get the market to the level where it should be. Because of ethanol, the market is shifting and it is having a cumulative effect on everything.�
