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.
Nebraska’s David Grimes believes there will eventually be sale opportunities on corn or soybean rallies, even though prices are lower than they’ve been in several years. A $4.50 cash corn price will get him interested. So will $11 cash soybeans.
In a move not often seen, old-crop soybean futures have caught fire and boosted new-crop prices. The result is a strong pricing opportunity for farmers looking for some early sales, says Mark Gold, a Chicago marketing analyst.
“Risk management – you will not survive without it.” That warning came from Randy Blach, CEO of CattleFax, at the recent National Cattlemen’s Beef Association convention in Nashville, Tenn. Even though the message was aimed at beef producers, Blach says it is also advice for farmers, who face corn and soybean markets as volatile as those for cattle.