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Alan Brugler, president of Brugler Marketing and regular contributor to Buckeye Farm News, began his presentation with some general observations:

• Use options – buy and sell them.

• Fund influence is huge (commodity trading funds).

• Traders open their wallets before they open their mouths. They have their positions a long time before the report comes out.

• Psychology affects most producers – you have to outsmart yourself.

• "Backyarditis" is a worldwide disease – if you see something in your own fields, you think it’s that way everywhere.

Market environment
Revenue per acre is at near record levels, he said. Government purchase of oil reserves has added nearly $8 to crude oil, making oil nearly $50 per barrel. Interest rates are going up, and notes and bonds are falling. This means borrowing costs are going up. The U.S. dollar "has been dropping like a stone," he said, but a positive of this is that it makes our exports more competitive in countries like South Korea, Europe and Japan.

Soybean Rust
Brugler said there is a lot of uncertainty and many variables related to Asian Soybean Rust – Where will it spread? Will scouting be good enough?

He predicted the entire eastern United States is going to get it and "Ohio is going to have it every year." The soybean rust news caused a little rally in beans, but he’s not sure if it is temporary. World production is up 21 percent and world soybean ending stocks are still growing, which brings the price down.

He also noted the correlation between soybean commodity trading funds and price – when the funds are buying prices go up and when funds are liquidating, prices go down.

Corn
Brugler said the market is oversold. We have record corn production this year, reminiscent of 1994. The United States has about 40 percent of ending stocks worldwide. He said when prices are in a downtrend, if there is a 20-cent rally, everyone wants to sell. That is often a mistake. In 25 years, only one annual low has been seen in November and none in December, nor has he seen any highs. He calls this a sideways period most of the time.

He briefly touched on wheat and livestock. He said wheat exports have done well, and he said more cattle supply is coming to the market, including from Canada. He said there is historically strong demand for hogs and record pork exports.

Brugler’s Commodity Corner column appears once a month in Buckeye Farm News. His next column will appear Jan.17.

Caption: Market expert Alan Brugler offered his observations about the current markets and gave members some marketing tools (see chart).