In light of the recent rally in soybean prices, producers shouldn’t sit on their hands when prices rise above their breakeven, says Matt Bennett, Bennett Consulting. Instead, they should consider making sales at $9 and higher if it pencils out.
“We need to be very cautious as to getting too bullish once the rally that we were waiting on finally gets here,” Bennett tells “AgDay” host Tyne Morgan during a recent Agribusiness Update segment. “We’ve been telling guys, ‘If you’ve been waiting on $9 soybeans, don’t sit on your hands and do nothing, especially if you can break even or do better.’ Make your first incremental sale on the new crop, and probably move out a lot of the old-crop soybeans, too.”
It’s likely another rally is in the cards, but farmers need to be prepared to act quickly if it transpires.
“I definitely don’t want to be just banking on some sort of a weather issue,” Bennett cautions. “I want to know what my breakeven levels are. That way, I can pull the trigger when it’s time because like last summer, it might be a very short-lived rally. We need to be ready whenever it gets here.”
As for whether the recent price rally could shift some acres to additional soybeans, Bennett thinks it’s a possibility.
“On highly productive acres, it’s pretty tough to make the case for soybeans over corn,” he says. “But there are a lot of fringe areas over the U.S. that can still raise really good yields on soybeans. Bottom-line yields on soybeans in the last two years have been phenomenal for a lot of people. When you get to that psychological point of $9 and above, I think it definitely changes people’s mindsets.”
Click the play button below to watch the complete interview with Bennett on “AgDay.”