The rare occurrence of a downtrend in supply and an uptrend in demand put the grain markets on an upward trend to close out 2020. For 2021, be prepared for a good old-fashioned acreage battle. In response, create a disciplined marketing game plan. We asked eight analysts to provide their best estimates on price direction and market strategies you can employ in 2021. Here is one of eight.
Angie Setzer, Citizens Grain
Export shipments, monthly crush numbers and South American production potential will have my attention in soybeans. How these three factors evolve will give us great insight into the amount of risk premium soybeans need to have in place well into August.
Gasoline demand and its subsequent impacts on ethanol will be what I pay attention to for corn. It is possible a reduction in demand for ethanol could limit the positive impact of aggressive exports. Of course, South American production will have the ability to make or break our export potential.
The dollar is a dominating factor when it comes to global economic developments. In December it became clear bearish sentiment wanted to dominate. But, with all of the unknowns from COVID-19, it is possible this bearish breakout could be more of a fake out.
This year should not be about marketing at breakeven, but about a targeted point of profitability. Once you hit that point, make incremental sales as the market moves higher.
Do not enter into a contract you do not understand, and do not feel changing your approach is necessary. Don’t be bogged down by where the market could go. Instead focus on what the current market values mean for your operation.
Read More
Alan Brugler: Compute 12-Month Price Targets
Mark Gold: 3 Grain Market Factors to Watch
Richard Brock: Use the Right Tools to Make Grain Marketing Fun
Bill Biedermann: Grain Demand Curves Have Shifted
Brian Basting: Lock in A Floor, Maintain Flexibility
Naomi Blohm: Watch Global Energy Policies
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Disclaimer: This material has been prepared by a sales or trading employee or agent of these analysts and is, or is in the nature of, a solicitation. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions and agree that you are not, and will not, rely solely on this communication in making trading decisions. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that these analysts believe are reliable. Such information is not guaranteed to be accurate or complete, and it should not be relied upon as such. Trading advice reflects good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice provided will result in profitable trades.
