Hello All,
In the recent months we have seen a lot of action in the agricultural markets, as well as the national position in terms of policies. With the president elect releasing statements about his plans for energy, changes happening with COVID-19 policies and new ag programs rolling out, along with activity from China’s ag purchases, the corn and soybean markets have shot up from a lull seen over the past 4 years. Corn and soybean prices alike have hit trade prices not seen since the tail ends of 2014-2015 (Figure 1.). These prices will most certainly impact the livestock producers as well as influence what we see in the grocery store and at the gas station.
Figure 1. Historical Prices by Month – provided by the USDA -NASS
As we look into the upcoming crop year, both markets look to follow a slightly bullish trend as both supply and demand favor positive increases in the futures markets. Estimated ending stocks for corn showed to be outlandishly higher than realized and the increased demand for soybeans proves to be somewhat steady as the global economy begins to recover from the influences of COVID -19. Ethanol stocks have gained volatility as the debates over fuel mandates continue, adding uncertainty to corn production values across the country. Like always, some of the main factors that will have an effect on producers ability to forward contract and lock in a profitable return still depends on the ever changing weather, most importantly the current weather in South America as their soybean crop is determined, and the planting intentions of the North American producers. See the CME chart for prices on the day this was posted (1/22/20).
| MAR 2021 | MAR 2021 | Show Price Chart | 506’2 | -18’0 | 524’2 | 522’4 | 522’6 | 506’0 | 142,040 | 11:23:47 CT 22 Jan 2021 |
||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MAY 2021 | MAY 2021 | Show Price Chart | 508’2 | -18’0 | 526’2 | 524’6 | 524’6 | 508’2 | 47,816 | 11:23:47 CT 22 Jan 2021 |
||
| JUL 2021 | JUL 2021 | Show Price Chart | 504’2 | -18’0 | 522’2 | 520’6 | 520’6 | 504’2 | 36,244 | 11:23:45 CT 22 Jan 2021 |
||
| SEP 2021 | SEP 2021 | Show Price Chart | 456’6 | -16’0 | 472’6 | 470’0 | 471’0 | 456’4 | 7,322 | 11:23:42 CT 22 Jan 2021 |
||
| DEC 2021 | DEC 2021 | Show Price Chart | 435’0 | -13’6 | 448’6 | 447’6 | 447’6 | 435’0 | 28,259 | 11:23:47 CT 22 Jan 2021 |
||
| MAR 2022 | MAR 2022 | Show Price Chart | 442’2 | -13’0 | 455’2 | 453’4 | 453’4 | 442’2 | 2,313 | 11:23:38 CT 22 Jan 2021 |
||
| MAY 2022 | MAY 2022 | Show Price Chart | 445’6 | -13’0 | 458’6 | 456’4 | 456’4 | 445’6 | 486 | 11:23:41 CT 22 Jan 2021 |
||
| JUL 2022 | JUL 2022 | Show Price Chart | 449’2 | -11’6 | 461’0 | 459’4 | 459’4 | 449’2 | 970 | 11:22:59 CT 22 Jan 2021 |
||
| SEP 2022 | SEP 2022 | Show Price Chart | 416’2 | -7’6 | 424’0 | 424’0 | 424’4 | 416’2 | 194 | 11:23:42 CT 22 Jan 2021 |
||
| DEC 2022 | DEC 2022 | Show Price Chart | 404’2 | -4’6 | 409’0 | 409’4 | 409’6 | 404’2 | 1,048 | 11:23:46 CT 22 Jan 2021 |
||
| MAR 2023 | MAR 2023 | Show Price Chart | 412’2 | -4’0 | 416’2 | 412’2 | 412’2 | 412’2 | 1 | 08:25:01 CT 22 Jan 2021 |
||
Producers and consumers alike should be cautious jumping head first into a position, but as the saying goes, “One in the hand is worth more than two in the bush!” Keep an eye on where prices sit as we approach the next WASDE reports and lower your expectations for consistent market direction while information is being processed across the board.
Best Regards,
Scott Buboltz
