Could 2022 offer the same profitable opportunities as 2021? The outlook for corn and soybeans is optimistic thanks to strong demand and potential production shortfalls in South America. Yet headwinds are present. We asked eight analysts to provide their best estimates on price direction and market strategies you can put to use in 2022.
Alan Brugler: Brugler Marketing & Management
I’m watching the ability of Brazilian and U.S. producers to expand production and rebuild global stocks. If successful, prices will revert to the mean. We expect less Chinese buying overall with the end of phase one. Biofuel use could be a big bullish factor as additional processing capacity comes online later in the year.
Aggressive Russian and Chinese territorial moves could result in U.S. trade sanctions and loss of markets. Inflation will be a bigger influence than it has been in decades. Producers need to be very careful to match cost exposures to revenue opportunities and not get margins squeezed when one moves the wrong way.
With tighter stocks-to-use ratios, opportunities should exist above realistic (not pie-in-the-sky) breakeven levels. Markets often revert over time, so there is plenty of downside risk with favorable growing weather.
These are excellent starting prices. Sell cash or forward contract if given a good price and good basis at the same time. Otherwise, set price floors with put options spreads, synthetic puts or cash market equivalents like minimum price contracts.
Compute 12-month technical and fundamental price targets given the latest market information. Get busy selling when we’re in the top 20% of those ranges.
Read More
Naomi Blohm: Corn and Soybean Market Factors to Watch
Bill Biederman: A Dichotomy of Possibilities
Brian Basting: Market Tools That Turn Uncertainty Into Opportunity
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