A marketing year to remember
Now it’s our turn. All eyes will be on weather here in the States as we are off to a slow, cool start to planting season, while dryness persists in the Plains.
With the slow start to planting, some wonder just what acres will go to what crop. Last month, USDA in its planting intentions report estimated corn acres would be down to 89.5 million and bean acres up to nearly 91 million. In the Plains they’ve experienced late snows, rain, cold, and dryness. It’ll be interesting to see if all the intended acres get planted to what producers had expected.
In addition, China is on COVID lockdown creating uncertainty about demand.
The war in Ukraine remains as Russia continues to export some wheat. Russia also promises once the country takes complete control, that they’ll step up exports of other grains. Some doubt exists about the time frame in which that could happen given all the destruction that has taken place. There also remains uncertainty about what Ukraine will be able to plant for this upcoming crop, keeping support under grains should that demand get switched to us.
Look for volatility to continue. New expanded price limits went into effect May 1, allowing for greater swings in the daily price action.
Nearby corn market has upside price objections over $8, while new crop looks to follow and may at some point become the leader. Soybeans have previous late winter highs in the mid-$17 range as new crop targets $16.
Also providing support is weather in Brazil for its second corn crop. Indonesia placed a ban on crude palm oil exports which has rallied soybean oil futures dramatically and provided support to soybean futures.
There are many factors and uncertainties yet to come as the world strives to replenish grain supplies. We will likely see unprecedented prices and volatility level. It’ll be a marketing year to remember. It’s also a year to market some crop a year or two ahead. December 23 corn is trading near $676 while November 23 beans are over $14.
Markets are not far off from the top of their ranges. If it’s been a while since your last sale, you may want to add to your sales here. Improve your overall average. Remember, it’s not about selling everything at the tippy top. Should weather improve and the crops gets planted, traders could take profits which may set markets back until summer weather takes hold.
As always, stick to your plan and don’t get distracted by the crazy volatility. Recognize where you’er profitable and make your sales accordingly.
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