What Does the New Year Hold for Corn Market?

As we look ahead to the New Year next week, I asked Colorado State University and Extension Economist Dr. Stephan Koontz what producers might expect in the 2016 corn market.
Koontz: “We have relatively strong dollar and plentiful supplies and we are looking at the prospect of relatively weak prices for most of 2016. That is of course not forecasting a drought. What we have with El Nino — we are looking at potentially some dry weather in the upper Mid-West. My take on that is that it will keep it relatively dry so we will have fewer planting problems next year compared to what we had this year. But I don’t see much prospects for going back to $4 in anything in corn prices — $4.50 or $425 — there is no reason to go back there.”
So in a down cycle, corn producers really need to examine their cost of production, Dr. Koontz continues
Koontz: “What will matter moving forward is that hard working producer — but not just hardworking its hard thinking. You’ve got to do some things to cut costs to really focus on the acres that are productive. Do some things to attempt to manage some of your higher costs with respect of corn production and some of those highest costs are certainly seed, fertilizer and land rent.”