Analyst, futurist place bets on where corn markets are headed

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What happens when two prominent speakers who make a living knowing what’s about to happen to agricultural markets follow each other around the farm meeting circuit, disagreeing? It eventually results in a wager, of course.

What happens when two prominent speakers who make a living knowing what’s about to happen to agricultural markets follow each other around the farm meeting circuit, disagreeing? It eventually results in a wager, of course.

Richard Brock, who studies grain prices, and Dr. Jay Lehr, an agriculture futurist, met this month at the American Feed Industry Association meeting in Fort Worth, Texas. The two men shared very different outlooks on where the price of corn may go over the coming months.

Brock insists corn will revisit $3 to $3.50 a bushel, citing the fact that U.S. corn exports have dropped dramatically in favor of corn grown in Brazil and Argentina. He also is factoring into his price prediction the knowledge that the current high price of corn still is driving more planted acres from soy and cotton into corn. Brock notes that while he is confident that we will not revisit the drought of 2012 in the coming year or two, rainfall may still be low in parts of the Corn Belt. 

Brock and Lehr also disagree on the role China may play in the price of U.S. corn. 

Lehr believes that although China buys little corn at today’s elevated prices, the giant nation will not be able to stand by without entering the market with huge purchases when and if corn approaches a $5 a bushel. This will create a virtual floor for the price of the grain, Lehr says. 

Brock says that China will buy no corn for their hogs because government officials are happy to continue to let their millions of hog farmers raise their 13-hog-average drift on food scraps. Brock says that this is a political decision; Lehr disagrees.

Lehr is so confident, in fact, that he has challenged Brock to a bet of $1,000 that during no consecutive 30-day period would corn drop to $4 a bushel or below between Feb. 1, 2013 and Jan. 31, 2015. The bet was made before 1,000 meeting attendees. Brock is so confident in his projections that he offered Lehr the opportunity to either double the bet or halve it and pay up now. While this drew a laugh from the audience, Lehr stuck to the original bet. Only 10 more months to go!



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