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.
Mark Gold, Top Third Ag Marketing
Markets continue to evolve. I am watching:
- Weather around the world. With carryouts relatively tight in most commodities, having decent crops in South America and in the U.S. will be critical.
- Demand’s influence on prices. In the past several months Chinese buying has been light in soybeans.
In 2022, there is concern on two political fronts. First, a possible Russian incursion into Ukraine would cause disruptions in the wheat trade.
The second possible issue is if the Chinese invade Taiwan. I would imagine this would cause the U.S. to impose some kind of sanctions against the Chinese, which would be an issue for the soybean and corn market.
Farmers need to learn to balance the risks of their grain marketing decisions. For example, if you sell grain early, replace those cash sales with call options.
Prices are now above breakevens on corn, wheat and soybeans. I would aggressively protect these prices now. If you sell grains, re-own with call options or buy put options to protect the downside. I would use cash sales protected with call options or buy put options to protect the downside.
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
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.
