Two Price Risk Factors Mean Producers Need To Talk With Us

By Matt Brandyberry
The first of four quarterly stocks and acres reports prepared by the USDA put acres for both corn and soybeans below expectations of even some of the more historical bulls out there. Very rarely does this happen and it could result in higher prices down the road as trends tracking 50- and 100-day moving averages remain up. Buy signals have been flashing indicators checked by our grain staff on a daily basis. 

As the planting season shifts into full gear, there are parts comprising Grain Marketing Plus that need your attention as the producer. Acres, yields, weekly export inspections, commitment of traders (specifications / non-commercials), and GMP’s guiding principles all matter. One feature of the program is that it earns you time value. Just like your trusted tractor, your marketing needs some maintenance. We are here to implement a plan you can live with. 

A hope is for prices to remain up and for the weather to be favorable across the U.S. through the end of the year. Even so, beating the market is going to be a real challenge with the temptation to hold out too long or the desire to sell the lot in one grand sale. One risk to favorable corn and soybean prices is if farmers are influenced to plant even more acres than are intended to be planted. 

A second price risk would be if exports, which have been raised by nearly 1 billion bushels since the middle of the trade war, slow down. Related risks are world ending stocks increasing because of slowed trade, larger U.S. production, or in the fall, a big supply or large new-crop production estimates out of South America. A third price risk would be if traders exit sizable long positions held for a half year or more by now. 

The stage is set for a potential shortage of soybeans and for corn ending stocks to shrink year over year. That has lifted prices down the crop board through the later contract months. As more of us get vaccinated, a hybrid model will be used to conduct progressively more business in-person. Of course, we need to schedule a date and time with you, and with planting going full-speed this may be a challenge. Historically, this has been one of the slower travel time periods in my time as a grain marketing specialist. 

A bull market like the one we are in needs fed regularly and after that some rationing is permitted. This keeps pricing going. 

So, give me a call at 765.490.2864. Let’s take action and plan ahead by using GMP. Thank you all for planting the vital crops used in abundance for feed, fuel, oils and meals, and other human consumables. 

 

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