01/16/08 A new price plateau?

January 16, 2008 There is disagreement among economists and market analysts as to whether the current high grain prices mean a new price plateau has been reached. In other words, while prices will come down, we will see higher lows than in the past. American Farm Bureau Federation senior economist Terry Francl, who gave a commodity outlook at this week's Farm Bureau annual convention, believes prices are on a new plateau. For wheat; Francl: "You can see the same plateau levels. We trade in this five to a little under this $3 range. Where will we be at in the future? I think we will jump this up somewhere between a $4 and $7 plateau." For 2008-2009 Francl believes wheat nationally will average $6.60 a bushel. Here is his outlook for 2008-2009 corn prices. Francl: "I think there is probably a 75% probability that we will trade that $5.50 to $6 range. And there is probably a 50% probability that we will trade above that $6 range. How high can we go? We jump these markets when you go from one plateau to another, usually around $2 or so, so you could talk about 7-50. I'm not predicting that and I don't think you should count on that, but if you should have some production problem it is not out of the question that could happen." Francl says while prices will remain high for grains in the coming year, market volatility is a constant threat. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.