Huge Crops Will Likely Keep Prices in Tight Range

October 22, 2018 03:39 PM
 
Record production on top of large carryover will likely keep prices in a tight range.

A storm is brewing. Record-high corn and soybeans yields, trade uncertainty and ample-to-excessive grain stocks equal a new reality for grain prices. “I’m more worried about the next couple years of prices than the last few,” says Stephen Nicholson, Rabobank senior analyst for grains and oilseeds.

Be proactive and have a marketing plan in place to benefit from any price spikes, coaches Naomi Blohm, Stewart-Peterson senior market adviser. “When the opportunities are there, make sure you are disciplined and capture those opportunities,” she says. “You can’t let marketing be on the back burner any more.”

Corn

 

2018 State Corn Yields
Source: USDA

Corn Price Forecast
Source: Rabobank

Compared to soybeans, the corn market has a more positive story for prices. “We have an even trilogy of demand for corn: exports are great, ethanol demand is solid and feed usage is strong,” says Naomi Blohm, senior market adviser with Stewart-Peterson. “But if we don’t get a trade deal with China, we’ll plant more corn and be back to an oversupply issue.”

 

Soybeans

 

2018 State Soybean Yields

Source: USDA

 

Soybean Price Forecast

Source: Rabobank

Even if soybean acres contract in the coming years, expected lower exports and high soybean stocks will keep prices on the defensive. “In soybeans, volatility is almost nil—that’s not a good place to be,” says Stephen Nicholson, Rabobank senior analyst for grains and oilseeds.

View a PDF of this infographic.

 

 

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Join Top Producer at the 2019 Top Producer Summit, which takes place Jan. 15–17, Chicago, Ill., and includes the Top Producer Seminar, Executive Women in Agriculture, Tomorrow’s Top Producer and Legacy Project Conference. Learn more and register at TPSummit.com.

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