Financial analyst shares showcasing systems

Right now is an ideal opportunity to conceptualize promoting systems for new yield corn and soybeans, said Nathan Thompson, agrarian financial matters teacher at Purdue University.

“There’s just been immense volatility in those markets,” he said during a webinar. “So, clearly, we’re not at the highs that we saw in the last several months. But don’t let that cloud your judgment on what a $5.43 futures price or $5.28 cash price is in terms of profitability.

“That’s certainly well above most people’s breakeven levels on corn. Just because you missed the five or six days that were at the top of the market, don’t let that mess with your mental accounting.”

In the event that you haven’t took any actions, consider securing basically little parts of that new harvest to secure a portion of those productive levels. There’s still disadvantage hazard in corn markets, Thompson said.

There’s a 20% possibility that December 2021 corn fates decrease another $1 among now and lapse, he said.

With regards to soybeans, the story is comparative.

“Thinking about new crop opportunities on soybeans, we’ve kind of been pushing people to think about what those opportunities might look like,” Thompson said.

“This morning, new crop November soybeans were trading at $13.61 a bushel. Making an adjustment for basis using central Indiana, that puts us at an expected harvest cash price of $13.31.

“On one hand, that’s not as high as we’ve seen that number in the past several months. But when you compare that to breakeven, we’re still looking at very profitable levels. As you make decisions and are evaluating some of your opportunities, it’s not too late to act.”

The stock conditions on soybeans are extremely close, yet there’s still some drawback hazard on soybeans.

There’s a 33% possibility that November 2021 soybean fates decay another $1 among now and termination, Thompson said.

Corn Outlook

The U.S. Division of Agriculture delivered the July Crop Production and World Agricultural Supply and Demand Estimate report. James Mintert, head of the Center for Commercial Agriculture at Purdue, examined the outcomes.

For the 2020 corn crop accounting report, USDA expanded feed utilization by around 25 million bushels. There was no adjustment of projected fare or ethanol use.

“They reduced the projected carryover by about 25 million bushels to a total of about 1.082 billion bushels — that’s about 7.4% of usage,” Mintert said.

“They raised U.S. 2020 marketing year average corn price by a nickel to $4.40. That’s simply reflecting the relatively strong prices we’ve had this spring and summer so far.”

Taking a gander at the 2021 monetary record, they raised the creation gauge by 175 million bushels.

“There’s no change in projected ethanol usage, still standing at about 5.2 billion bushels,” Mintert said. “They raised projected exports for the 2021 crop year by 50 million bushels to 2.5 billion bushels, about 12% below 2020 estimate, reflecting expectations for some smaller exports going to China.”

The USDA raised projected consummation stocks for the finish of the 2021 advertising year to 1.43 billion bushels, around 75 million bushels more than the June gauge.

Finishing stocks at end of 2021 advertising year are projected to be 9.6% of utilization.

“On the world side, they reduced Brazil’s current production by 5.5 million metric tons, but simultaneously raised Argentina’s estimate by about 1.5 million metric tons, compared to their estimates a month ago,” Mintert said. “No change in China’s expected imports from all sources compared to June estimates.”

Soybean Outlook

On the U.S. soybean 2020 yield monetary record, USDA decreased assessed imports by 15 million bushels to 20 million bushels absolute.

“They reduced soybean crush estimate for the 2020 crop year by 5 million bushels to 2.17 billion bushels,” Mintert said. “They reduced exports by a small amount — 10 million bushels to 2.27 billion bushels.”

Remainder was left unaltered at 135 million bushels, equivalent to 2.9% of utilization.

The U.S. 2020 promoting year normal soybean cost was diminished by 20 pennies to $11.25 a bushel.

There were not many changes on the 2021 yield monetary record, Mintert said.

“They did lower the marketing year average soybean price projection for the ’21 crop by 15 cents to $13.70,” he said. “On the world side, no change in Brazil’s current estimated production. They reduced Argentina by 0.5 million metric tons. No change in their preliminary estimate of Brazil or Argentina’s early 2022 harvests.

“They reduced current year estimate of China’s imports by 2 million metric tons and reduced their forecast for next year’s imports by 1 million metric tons.”

Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No  journalist was involved in the writing and production of this article.

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