It sounds like a broken record, but soybean futures continue their downward slope. Good weather and projections for a big crop that will swell supply numbers are more than bearish on prices, notes Dan O’Brien, Kansas State University Extension ag economist.
“I’ve learned to put more time in producing, trusting my grain elevator to do much of the marketing,” says Steven Albracht, a Hart, Texas, grower who has a corn, cotton and triticale rotation, all under irrigation. Albracht knew the corn pipeline would eventually refill and put pressure on prices. That’s why he made sure his 2014 corn was being marketed while he was on the combine cutting his 2013 crop.
Good pollination, good weather and a projected average yield that will push 170 bushels per acre – or more – are putting extensive pressure on corn prices. But will they crash through $3 at your local elevator? It’s not out of the question, says Ed Usset, University of Minnesota grain marketing specialist.
New-crop soybean futures prices have plunged from $12.50 per bushel in late June to $11 or below in three weeks. They closed down 9 cents at $10.85 Friday. And there’s no sign they will turn around anytime soon, says Jim Hilker, Michigan State University Extension ag economist.
Unlike new-crop corn futures that appear to have settled into a seasonal slide pattern, new-crop soybeans have seen less downside movement. Still, market analysts feel getting up to 50% of your crop marketed at above $12 per bushel should payoff if a big crop comes in.
Is new-crop corn in its seasonal slide? Sure looks like it, as prices hit $4.50 per bushel and lower, down more than 50¢ since early May. Without weather scares that can threaten the 2014 crop, farmers should look harder for good sell opportunities, says a Kansas commodity broker-analyst.
If the soybean crop progresses smoothly into late summer and fall, new-crop soybean cash prices could tumble down to near $10, and could drop to $8.50, said Dan O’Brien, Kansas State University Extension grain economist.
USDA’s projected average 2014 corn price of $4.20 looks too low, said Chris Hurt, Purdue University ag economist and marketing specialist. Friday’s USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports had a bearish impact on corn futures. New-crop December 2014 corn futures closed at near $4.97 per bushel, down more than 13¢.
November soybean futures remain well above $12 per bushel, even with price pressure much of last week. And $12 should be a strong foundation for getting much of the 2014 crop marketed, says Ed Usset, University of Minnesota grain marketing specialist.
If you have most of your 2013 soybeans in the bin, “it could be time to get a bunch of them sold to guard against lower prices” that could follow the March 31 Prospective Plantings report, says Jim Hilker, Michigan State University ag economics professor. “I think we’re in trouble on new-crop (2014), even with the lowest estimates of 78.5 million soybean acres,” he adds.
Thinking outside their regional market led Kansas farmers Brett and Clint Reiss to find a much stronger corn basis. And by contracting to make 1,000-bushel corn sales every week, they will obtain orderly pricing on up to 30% of their 2014 crop, while having a $4.50 floor.
Ken McCauley believes the new Farm Bill’s commodity support programs provide his Kansas farm a good safety net. But like most growers he wants more information on farm-bill provisions, including the Agricultural Risk Coverage and Price Loss Coverage programs, still being finalized by USDA.
With crisis in Ukraine, China’s stockpiling of corn and potential for good U.S. growing conditions, corn prices could go virtually any direction at about any time. And with December 2014 futures prices above $4.80 per bushel, getting a few bushels priced now could provide protection against the threat of prices $1 or more below that this fall, says Ed Usset, University of Minnesota grain marketing economist.