Improved Prices Mean More Marketing Options
By Matt Brandyberry
Prices are at three year highs for soybeans and wheat, levels not seen since 2014-15. Cash values at the U.S. Gulf are near $12 per bu. for soybeans, $5.40 per bu. for corn, and $7.40 per bu. for wheat. Exporters are also scrambling.
Dry and hot conditions in parts of South America with temperatures as high as 117 degrees, and little precipitation chances in Russia, China and parts of the U.S., lifted prices. Extremely destructive storms also occurred in China and the U.S. ending stocks projections for corn, soybeans and wheat continue to shrink.
Most bid sheets have higher cash prices for soybeans during the period of December to January 2021, higher than any other delivery month of 2021. In some cases, harvest delivery soybeans are higher than February – December 2021 prices as the board inverts, going down to the November 2021 futures.
The November 2021 is priced at a large discount compared with the nearby November 2020 futures. This has happened before, and we recommend actively responding by continuing to make sales of unsold crop year 2020 production. Targeting $10 per bu. bids for a new crop sale may pay off by ensuring a profit per acre for your next harvest. Be sure to re-evaluate after the first of the year if offers haven’t hit.
COVID-19 has caused continued lower ethanol demand. Exports, however, have recently been large, and quickly changing weather reminds us that by having the capacity to make multiple sales for a given number of bushels, producers can capture upside potential while limiting downside risk. Just before the middle of harvest, when generally prices are at their lowest level, prices recovered to nearly pre-COVID levels and basis had improved at most elevators.
Talk of dryness in parts of the U.S. Plains, Russia and Ukraine also added to a bullish wheat price move. Soft red winter CBOT wheat futures have had opportunities above $6 for July 2021. Be sure to let us know how many acres you plant this fall, and get a start on forward contracting, or using hedge-to-arrive contracts for some wheat at favorable prices.
Get in on the favorable prices while you can. As is the case seemingly every year, there are a great many unknowns to be answered. What will the weather be in the growing regions of South America between now and the end of the current planting window? Will the surge in exports maintain the current fast pace?
We are here to help you through another harvest. Call us to discuss your marketing options. 765-490-2864.