Angie Setzer: Establish Profitability for Your Farm
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.
Angie Setzer, Consus ROI
I’m watching Chinese demand and South American production for corn and soybeans. Those two factors will play a significant role in market moves as we work into the summer and beyond.
We will continue to see talk of inflation playing a role in 2022 as we did in 2021, but the comparisons likely end there. What Russia does with Ukraine and what China does when it comes to Taiwan will likely be the two biggest influencers when it comes to market direction from a geo-political standpoint. A war between Russia and Ukraine would be bullish for commodities, while I feel Chinese aggression would be bearish.
It’s no longer about just breaking even — now it is all about establishing profitability for your farm. Take the time to recognize your points of profitability, so you have a clearer picture when it comes to the marketing steps you should take.
Once you reach your initial point of profitability, begin incremental sales with higher priced targets in place for additional incremental sales. Capture and maintain profits by using options, hedges, cash sales or, best yet, a combination of all three tools.
Use the tools you feel comfortable with to manage risk. You must know your costs and be honest with yourself about what they are and how you need to manage them.
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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