This past year was unlike any we have seen in the commodity market for several different reasons.

One of the most talked about developments in the commodity market this past year was harvest – one of the fastest on record as little, if any, disruptions took place across the Corn Belt.

This caused logistic issues at many terminals, mainly from a shortage of storage. The fact that very little of the crop needed to be dried added to the speed at which it was harvested.

Not only was harvest fast, but yields came in better than expected. This was especially the case in the western Corn Belt where weather was more favorable for crop development.

It was not uncommon to hear of record yields in the western Corn Belt, mainly on soybeans.

These high yields not only caused regions delivery issues, but pressured basis as well.

A benefit of these high yields was the fact in many cases they generated equal, if not more, revenue per acre than what farmers had last year with higher futures.

It was a different story in the eastern Corn Belt though, as yields fell short of the record seen the previous year. Many were still better than expected, but given the reductions that were seen and adequate storage, movement was slower.

This caused basis values to hold firm in eastern locations.

A factor that weighed on all commodities this past year was demand. Many of the traditional buyers of U.S. commodities went to alternative sources causing U.S. reserves to build.

Elevated global production was one reason for this action, but so was currency exchange rates.

The U.S. dollar was very strong through much of 2015 compared to other currencies which favored their export programs.

We did see solid domestic demand in 2015, but not enough to compensate for the losses in the export market.

2015 was one of the worst on record for managed money in the commodity market.

In fact, many hedge funds claim 2015 was their worst year for returns in history.

Several hedge funds have announced there are suspending operations in recent months as they lost money all year, and may remain absent from the commodity market throughout 2016 as well.

Regardless of what we see for traditional market fundamentals, the absence of this managed money will limit market potential.

U.S. producers are starting to make decisions on new crop acres. This is the time of year when many book their inputs, including seed and fertilizer needs.

At the present time, soybean production still shows more return than corn, and it is thought soybean acres will increase as a result. Normally this would cause corn to push for acres, but the fact corn reserves are more than adequate may limit this activity.

Some analysts believe acres in fringe regions will shift to hay production as that crop has the best return on investment.

The down side of this is that hay production is a long-term commitment for acres, not one that can be changed every year.

We are already seeing estimates made for next year’s carryout possibilities on corn and soybeans. If we would see yields similar to this year and steady demand figures it is likely ending stocks of both corn and soybeans will increase.

Some analysts have corn from 2 to 2.5 billions bushels and soybeans from 500 to 700 million bushels. While it is quite early and these numbers will change several times, the simple thought of ending stocks this high are keeping a cap on commodity values.

Many of the factors that impacted the commodity market in 2015 will again in 2016. One of the main ones appears to be depressed market values. This does not mean producers will not have opportunity to market their crops at profitable levels, just that margins may again be thin.

The windows in which to make these sales may be limited as well. The best defense against a market such as this is to have a realistic risk management plan in place and to follow it.

Karl Setzer is a commodity trading advisor/market analyst based in the West Bend office of MaxYield Cooperative. He can be reached at (800) 383-0003.

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.