12/22/08 Volatility called key challenge in grain marketing for 2009

Farm and Ranch December 22, 2008 In an outlook for 2009 Rabobank Food and Agribusiness Research and Advisory team executive director Karol Aure-Flynn, says volatility is the centerpiece for the grain and oilseed markets in the coming year. Aure-Flynn: "The old adage, "the difference between success and failure is how well business manages risk", is familiar to everybody. But volatility as one of the key defining issues moving forward in grains and oilseeds and will mean that the appropriate risk management plan will be more important to overall business strategy wherever you are in the supply chain." Aure-Flynn says that for the near-term outside markets will continue to have a strong influence. Despite currently lower prices and higher volatility, Aure-Flynn says the long term situation is basically good for grains and oilseeds. Aure-Flynn: "It was a demand driven boom. Global stocks remain historically low." Aure-Flynn says a sharp drawdown in China's stocks in particular leaves the world vulnerable to supply shock. She says once the market resumes focusing on fundamentals of low stock levels and increased demand for food, and the strong de-leveraging process coming from investors slows down, it is expected that commodity prices will partially recover from levels reached in October. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.