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Your Best Grain Marketing Window May Be Closing

04:33AM Mar 08, 2019

Corn and soybean prices are typically highest in the spring and early summer. But, the golden rules of grain marketing are less certain, as continued trade negotiations and record global stocks weigh on the markets. 

As corn and soybean prices continue to trade in a narrow range, it’s easy to ignore the markets—don’t! 

“Now is not the time to be complacent,” says Stephen Nicholson, Rabobank senior analyst for grains and oilseeds.

“I think the window for corn marketing is closing,” he says. “That’s because on March 31 we get the acreage number, and we’ll probably see more corn acres. Some of that increase is already built into the market, but that report always has few surprises.”

Last month, USDA pegged the 2019 U.S. corn crop at 92 million acres, which is a 3.3% jump from last year.

In addition to more acres, Argentina and Brazil are harvesting a corn crop right now that’s larger than last year. Plus, Brazil’s second crop of corn will be coming on, and it will also be larger than a year ago.

“So, you've got all this pressure coming to the market in the next 30 days or so,” Nicholson says. “The market is probably going to see the downside in corn, that’s where I’d put my money.”

December corn has been at $4, and it doesn’t seem to want to go much higher, he says.  “So, this may be your opportunity to get something done on corn, particularly on futures.”

For soybeans, Nicholson says, farmers face the same tight marketing window. 

Until the tariffs get lifted, which will happen, soybean prices have been stagnant, he says. “The collective opinion is, if the tariffs get lifted, beans will come up. Is that 30¢, 40¢ or 50¢? I don’t know. But why are you not getting orders in place for soybeans now in in preparation for that move? Because if you wait until the move happens, you're probably too late.”

USDA’s current estimate pegs the 2019 soybean crop at 85 million acres, which is down 4.7% from last year. 

Additionally, Nicholson says, Brazil and Argentina are harvesting a better crop than they did a year ago and we have record global stocks of soybeans.

“I would get orders in place now for soybeans,” he says.

Matt Bennett, market analyst with and Bennett Consulting, agrees. 

“With the political issues we’re facing, we are crazy to not have orders in place,” he says. “I can’t outguess the market. As a producer, I don’t need to outguess the market. Instead, try to tune everything out other than answering this question: Can I made money at these prices?”

To manage risk in this volatile environment, Bennett suggests the following strategies.

  • Stay up-to-date on current markets, but don’t become oversaturated with information.
  • Devise a thought-out marketing plan based on your specific needs. Focus on profit, not price.
  • Control your emotions as much as possible—particularly fear and greed.
  • Stay focused in your approach by placing offers and leaving them in. 
  • Keep abreast of how the sales you’ve already made impact break-evens later in the marketing year. If you market above your breakeven early, how does that affect the sales you have left to make?

Check current market prices in AgWeb's Commodity Markets Center.


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