UIUC Weekly Outlook: March USDA Reports and Beyond

“So much uncertainty about stocks, consumption, and production makes pricing decisions difficult, particularly for the 2012 crop,” Good said. “Soybean prices have rallied sharply from the January lows and appear to be pricing in a smaller South American crop, unchanged to declining acreage in the United States, and smaller stocks by the end of the 2012-13 marketing year.

“November futures are well above the spring price guarantee for crop revenue insurance, with some looking for a move back to $14,” Good said.  “Some price protection seems prudent with prices well above insurance guarantees.”

In contrast, Good said December corn futures have declined back to near the January lows and are below the insurance price guarantee in anticipation of a large crop and rebuilding of inventories during the year ahead. 

“More patience may be warranted in making additional new-crop sales of corn,” Good said.