Is 2023 when the shoe drops? Or will it provide some of the same profitable grain marketing opportunities as 2021 and 2022? Questionable corn demand and expected production highs in South America bring major questions to the corn and soybean outlooks. Yet positive factors are evident. Top Producer asked eight analysts to provide their best estimates on price direction and market strategies you can employ this year. Here is one of the eight.
Naomi Blohm, Total Farm Marketing
The primary demand focus for both corn and soybeans is U.S. exports. Global players have learned the importance of spreading out their sources for grain imports and to not solely rely on one country for product in case of weather or freight issues. The higher value of the U.S. dollar has weakened demand for U.S. grains compared to the past.
On the supply side, the U.S. is still dealing with nine grain and oilseed commodities with historically tight ending stocks, just like last year.
The Fed being hellbent on fighting inflation will temper grain commodity prices in the year ahead. Their goal is to reduce demand, while they hope Mother Nature cooperates weather-wise in 2023 to increase the overall supply of grains.
Some producers are likely at or above breakeven now. Use the seasonal grain tendencies to your advantage this winter and spring and be more aggressive to capture and lock in prices early.
It is rare for a bull market to last more than two years. Be confident with your cash marketing skills and forward contracting.
Also, this is going to be the year to understand various put option strategies to protect unpriced bushels for 2023 and potentially beyond.
Read More
Mark Gold: Protect Profitable Prices with Put Options
Alan Brugler: Consider Grain Holding Costs and Set Price Floors
Matthew Kruse: Avoid Market Noise and Stay Focused on Price Targets
Bill Biedermann: The World Needs Both North and South American Bin Busters
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.
