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Marketing opportunities for 2021 and 2022 crops

by Dave Bau, Extension Educator, Ag Business Management, U of M Extension Regional Office, Worthington

Farmers have a tough decision each year trying to market their crops at the appropriate time, at profitable levels and at the highest price possible. Since August 2020, corn and soybean prices have been rising to prices last seen in 2012. Table 1 shows the high and low cash prices for corn and soybeans in Worthington each year. Soybean’s high price was above $17.00 in 2012 and 2013 and corn’s high prices were above $7.00 in 2011, 2012 and 2013.

Table 1: Worthington high and low soybean and corn cash prices during year

Soybean                                                                                            Corn

Year

High

Low

Difference

 

Year

High

Low

Difference

2020

12.49

7.84

4.65

 

2020

4.41

2.62

1.79

 2019

8.89

7.40

1.49

 

2019

4.37

3.35

1.02

2018

9.82

7.26

2.56

 

2018

3.64

2.92

.72

2017

9.74

8.41

1.33

 

2017

3.41

2.84

.57

2016

10.82

8.03

2.79

 

2016

3.87

2.65

1.22

2015

10.00

8.07

1.93

 

2015

3.86

3.24

0.62

2014

14.82

8.53

6.29

 

2014

4.82

2.81

2.01

2013

17.74

12.20

5.54

 

2013

7.45

4.05

3.40

2012

17.65

11.32

6.33

 

2012

8.22

5.80

2.42

2011

13.87

10.77

3.10

 

2011

7.49

5.55

1.94

2010

13.16

8.79

4.37

 

2010

5.77

2.94

2.83

2009

11.97

8.23

3.74

 

2009

4.11

2.78

1.33

2008

15.50

7.72

7.78

 

2008

7.00

2.91

4.09

45 yr Ave

8.63

5.95

2.68

 

45 yr Ave

3.40

2.24

1.16

Current bids for Worthington soybean and corn are listed in Table 2. As indicated, both soybean and corn prices have not reached those high price levels yet, but trade talk suggests they could reach those levels before the marketing year ends in September 2021. The good news is these are historic high prices, while the bad news is the vast majority of farmers have no 2020 grain left to sell at these high prices. Even though farmers may not be able to take advantage of current prices, they can take advantage of good prices available now for future years.

Table 2 lists current corn and soybean prices at $6.64¼ and $15.43¾ with forward contract bids at $5.18¾ for 2021 corn and $11.35½ for 2021 soybeans. These are great prices by historic standards, yet it is hard for farmers to sell next year’s crop at significantly lower prices, such as $1.45½ for corn and $4.08¼ for soybeans.

Table 2: Current grain bids, Worthington, MN, April 28, 2021

Soybeans

 

 

 

 

 

Corn

 

 

 

 

 

Delivery

Cash Price

Futures Changes

Basis

Futures Month

 

Delivery

Cash Price

Futures Change

Basis

Futures Month

 

Apr-21

15.4375

7'2

0.1700

S1N

 

Apr-21

6.6425

-1'2

0.1100

C1N

Jul-21

15.3875

7'2

0.1200

S1N

 

Jul-21

6.6425

-1'2

0.1100

C1N

Oct-21

12.7275

-1'6

-0.6800

S1X

 

Oct-21

5.1875

-7'4

-0.3600

C1Z

Nov-21

12.7275

-1'6

-0.6800

S1X

 

Nov-21

5.1875

-7'4

-0.3600

C1Z

Oct-22

11.3550

2'4

-0.8300

S2X

 

Oct-22

4.4525

-3'4

-0.4500

C2Z

It is hard for farmers to price 2021 and 2022 crops at lower than current prices. It may be a great opportunity to sell. Farmers should first determine their breakeven cost estimates for both 2021 and 2022 crops, then estimate acres planted, along with expected yield, to determine total yearly bushels of corn and soybeans to be marketed in 2021 and 2022. Prices for 2021 and 2022 crops are well above historic price levels and hopefully above expected breakeven prices. Now could be an excellent time for farmers to consider selling part of their 2021 and 2022 crops. Some farmers are not comfortable selling any crop before it has been harvested, but harvest prices are typically the low prices of the year and current high prices offered might disappear before harvest.

Some farmers are only interested in selling a small portion pre-harvest and some will sell a large percentage of their crop pre-harvest. Revenue insurance plays an important role in pre-harvest marketing. Farmers can also purchase call options if they are concerned prices will continue higher after they have completed pre-harvest sales.

Table 3: Yearly average Worthington, MN corn and soybean prices

Calendar Year Averages

Corn

Soybeans

2020

$3.37

$8.94

2019

$3.73

$8.14

2018

$3.29

$8.56

2017

$3.13

$9.02

2016

$3.17

$9.19

2015

$3.48

$9.06

2014

$3.85

$12.25

2013

$6.04

$13.99

2012

$6.82

$12.64

2011

$6.53

$12.62

Farmers should develop a marketing plan and determine if current prices offered for 2021 and 2022 crop would generate a profit for their farming operation by covering their breakeven prices.


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