Don't let price drift cause complacency in marketing decisions


When market volatility is not the motivating factor for growers to sell, how do marketers avoid selling complacency setting in?

Jonathon Driedger of Leftfield Commodity Research says that the markets could test new highs in the year ahead, but that small moves over time may be more likely in the year ahead.

At the top of the new year, crop markets are sitting at already elevated levels. From a multi-year perspective, Driedger says markets may have set in a higher resistance level and new, elevated trading range for most crops.

So does that mean markets are set to trade higher from where we’re at today? Not necessarily, says Driedger. Several factors are at play that could justify both a bearish and bullish outlook, depending on how they shake out.

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We’ve seen some incredibly high levels not that long ago, Driedger says, but it would have to take everything stacking up on the bearish side to even test what had been previously normal levels. Driedger thinks trading in an elevated range is a reasonable expectation, but presuming that this is a new normal may be premature as prices are not guaranteed to stay elevated.

It is easy to get lulled into complacency when market discussions aren’t making headlines. Driedger says if we’re cognizant of the fact and practice discipline in marketing, it avoids being forced into a choice when prices may not be as favourable. Driedger emphasizes the need to keep an eye on the market and maintain one’s ability to make decisions based on market trends as necessary.

Driedger says you don’t want to overreact, but being attentive being disciplined and not being complacent, are the key to weathering the market this year.

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