Grain Markets Overview: 2019

From AgWeb, Nov. 19:

Bull-Bear Outlook 2019: Influenza A virus subtype H5N1 New Reality For Grain Markets 

Geopolitical forces, excessive soybean supplies as well as a probable shift to to a greater extent than corn acres exercise volatile corn as well as soybean markets for 2019. While your grain marketing conception faces many headwinds, don’t live on surprised when a few tailwinds render opportunities for you lot to capture profits. Below you'll uncovering the recommendations shared past times 5 commodity analysts. We'll issue recommendations from 4 to a greater extent than analysts tomorrow.

Brian Basting, Advance Trading - The merchandise effect amongst Cathay is critical. Without a prompt resolution, U.S.A. of America soybean carryout mightiness expand considerably as well as pressure level prices. With globe corn need expanding, the marketplace is depending on a rebound inwards South American production. Influenza A virus subtype H5N1 recovery inwards output could send the marketplace lower, patch some other shortfall mightiness render marketplace support. One potential departure from 2018 mightiness live on indications of active investment inwards Brazilian agriculture past times China, which could live on negative to prices. Solidifying relationships amongst long-time trading partners could live on a fundamental to fuel cost strength. Price prediction is impossible, thus marketing flexibility is preferred. Options are a marketing tool to flora a flooring for anticipated (or realized) production, simply also render the chance to participate inwards rallies. An payoff of buying a position choice is that if a crop work surfaces (eg. 2012 drought), bushels are non committed to live on delivered. It is prudent to add together cash sales to your portfolio inwards improver to the long choice purchases. Since the crop insurance harvest cost has been established, it is critical to flora downside cost protection via cash sales as well as choice management on all bushels inwards storage. South American weather condition trends every bit good every bit developments inwards the merchandise dispute amongst Cathay volition probable live on marketplace movers. Monitoring cash dry soil trends every bit good every bit ship inwards the futures marketplace is prudent. There are likewise many years where ship opportunities are missed.

Bill Biedermann, Allendale Inc. - U.S. producers volition confront a marketing challenge this year, no affair if you’re bullish or bearish. The geopolitical hot spots some the globe are in all likelihood every bit heightened every bit they were prior to WWII every bit the globe migrates to a protectionist posture. This volition brand for extreme volatility every bit good every bit an extreme incentive to rapidly arrive at a merchandise expansion agreement. Corn has a well-nigh tape tight stocks-to-use ratio. In 2019, projected ending stocks reject past times 15% compared to 2018 as well as reject 30% from ii years ago, patch globe stocks autumn 20% as well as 30% from ii years ago. Additionally, an adverse weather condition scenario would motility an eye-opening move. Maintaining ownership is imperative as well as volition offering the best potential property gain. But, nosotros all postulate cash flow. Thus, if you lot bring to sell, supersede it amongst futures. If you’re non comfortable amongst that, thus piece of work options. For 2019, larn started when sales well-nigh $4.20 or profitable levels. Without merchandise agreements, soy stocks could striking 1.2 billion bu., patch a merchandise expansion could hateful 600 meg bu. I would piece of work puts to protect the downside risk, unless your dry soil has improved as well as you lot tin sell cash. I would supersede ownership amongst an affordable call. If the merchandise disputes continue, hold your nub on stock markets as well as the globe soybean cost for direction. As long every bit the globe soybean cost is strong (north of $11), our cash cost is attractive. That’s why our marketplace is belongings at prices higher than traders expect. If globe prices sink, I’d rather lose a 25¢ premium than lose a dollar inwards cash ownership....

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