*The below recap is from the Commodity Classic on March 2, 2021 and market pricing and forecasts may have changed
Commodities Expert, Al Kluis and Chief Grain Strategist, Cory Bratland, joined a Q&A session with Dave Mowitz from Successful Farming during the 2021 Commodity Classic to discuss market updates on corn, soybean, and wheat prices. Al provided his projections on soybean acres for the year and discussed chart trends on corn and soybean markets.
When discussing how March is a formational time of the year for markets, Cory shared how “all eyes will be on how many acres we get for the upcoming spring which will be interesting to watch because corn and soybeans cannot lose any acres and both need as many as they can get”. Dave raised the point that Kluis is predicting a significant increase in soybean acres. Al explained the USDA numbers/projections expect 500 thousand to 1 million acres less of spring wheat and a large drop in oats acreage, and that North and South Dakota will be shifting to more corn and soybeans this year. He is also predicting there will be 182-184 million acres of corn and soybeans combined.
Profitability of corn, soybeans, and wheat was also a topic of discussion. Al shared that the profitability of corn is currently #1 and better than soybeans by about $50 an acre, but also explained that soybeans are better than wheat by about $100 an acre. Al believes over the past three years the USDA has “consistently underestimated corn acres and that the last three years, corn acreage has come in larger than USDA and larger than print trade estimates in the soybean numbers”.
Lastly, Dave asked if Kluis expects to see any early volatility this year due to demand. Al outlined how the market has already been volatile, but “you have seen nothing yet and should prepare for some pretty extreme volatility” in the months to come. He also shared that he doesn’t expect volatility go away until 92-93 million acres of corn and beans are planted, there is a good crop developing in the field by July, and a good weather forecast comes in. By October and November, there will be adequate supplies and the old crop premium of corn and soybeans to new crop will come crashing in.
Al’s long-term charts would indicate “the people locking in today’s prices will be happy with those results at harvest because the current new crop prices they see available today will not be present in October and November”. He gave advice to viewers watching to “stay disciplined” throughout the markets volatility and swings.
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