Ethanol and biodiesel demand and commodity/index funds continue to change grain market dynamics, but one thing remains constant — the emotion of the market.

“It’s not facts that are important to the markets,” says grain analyst Richard Brock. “It’s people’s opinions of the facts that move the markets. And that’s why the markets are so emotional. If you can understand people, you can have a better understanding of how the markets work.”

So what does your inner psychologist say about your marketing plan?

According to Brock, many farmers will often base this year’s marketing plan on what happened last year. It’s seems logical to consult your most recent memory. But does it work?

According to Brock, not very well. There have been exactly two times in the past 30 years when using the same marketing strategy would have worked two years in a row.

Instead, the power of marketing comes down to how to make a decision.

“Everybody wants to wait for 20-20 hindsight, but by that time, it’s gone. Forget about whether the market is going up or down. That doesn’t really matter. What matters is what you’re going to do about it.”

High peaks in prices don’t come along too often, so don’t invest too much emotion in that either. For example, in 1917, corn prices hit $2.21 a bushel. Thirty-one years later, in 1948, they hit $2.84. Twenty-six years later, in 1974, they hit $3.97 and 22 years later in 1996, they climbed all the way to $5.25.

“Each time, the market goes a little higher and the time period between the cycles is a little shorter,” Brock says. “If the next cycle in corn comes in 18 years, that would put it at 2114. So if you’re holding out for $6 corn, you have a little bit of a wait.”

Meanwhile, wholesale fuel prices are headed down and so could nitrogen prices now that natural gas prices are below $7 per million British thermal unit. Natural gas is used to produce anhydrous ammonia and other nitrogen products. However, Brock points out that a lot of nitrogen fertilizer has already been manufactured, and it was processed when natural gas prices were high, so it may take a while for low-priced fertilizer to get to the market.

The Illinois-based research firm Allendale, Inc., has released its estimates of acreage for 2006. Its report includes a 1.5 percent decline in corn acres, to 80.25 million acres, a 2 percent increase in soybean acres to 74.2 million acres, and a less than 1 percent increase in wheat acres, to 57.97 million acres.

Corn planting intentions is still the 12th largest planting on record. Peak corn acres in 1976 were 84.59 million acres. A trend yield of 147.58 bushels would imply corn production of 10.75 billion bushels versus last year’s 11.11-billion-bushel crop.

Soybean planted acres would be the third highest in history. Record soybean plantings were 75.21 million in 2004. A trend yield of 41.21 bushels implies soybean production of 3.01 billion bushels versus last year’s 3.09-billion-bushel crop.

Wheat acreage would be the second lowest planted acreage in 30 years. Last year’s 57.23 million acres was the lowest. A trend yield of 43.23 bushels per acre, would imply wheat production of 2.12 billion bushels versus last year’s 2.11-billion-bushel production.

e-mail: erobinson@prismb2b.com