Channel Grain Marketing Consultant
As we move closer to planting season, producers must consider what factors are going to have the biggest impact on their operation. With government shutdowns and U.S.-Chinese relations in a quandary, the 2019 season already has many variables impacting the market. This year, the ability to manage price volatility may mean the difference between making a profit or not.
As I’m writing this column, the USDA’s February World Agricultural Supply and Demand Estimate (WASDE) has just been released with some interesting updates. The 2018 corn crop was adjusted down, and the carry and stocks/usage ratio is the narrowest it’s been since 2012. Fundamentally, grain stocks need to get to a healthier level. The lack of fall fieldwork and nitrogen applications, due to wet conditions in much of the Corn Belt, will have the markets closely scrutinizing the weather this spring and summer for clues about crop health.
For soybeans, the WASDE report gave the market some support with lower stocks of both U.S. and world soybeans. Yes, we have record-large stocks globally, but we’ve seen estimates level off and start to move lower. Given some of the questions about corn planting, it would appear soybean acres could be above average again in 2019. Be sure to prepare a risk-management plan to take advantage of soybean market highs before planting.
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