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Renewed hope for crop prices

Last fall's corn harvest in Central Illinois / CIFN file photo.

FAIRBURY – In the midst of international uncertainty, there is a glimmer of hope for agriculture.

The push for electric vehicles can negatively impact ethanol demand, but that is offset by the burgeoning renewable fuel market. This will likely have a positive effect on soybeans and soybean acres.

“The loss of ethanol over time is something that makes farmers very concerned and worried, yet the renewable diesel story is something to give them a lot of renewed hope,” explained Kent Beadle, director of producer brokerage for CHS Hedging, during a meeting in Fairbury this week.

Beadle also covered geo-political factors during his presentation for local producers. The Russia and Ukraine situation is very bullish for wheat given the amount of exports Ukraine has. Offsetting this on the other side is China and some of the concerns over Taiwan with a potential invasion after the Olympics. Beadle and others in the industry wonder what the response may be.

“Will that impact our exports to China long term?” he asked.

There are no sure answers about these two major hotspots in the world right now but farmers are encouraged to pay close attention and see how everything unfolds.

Beadle feels current crop prices are very good and provide an excellent return to the operating costs, assets and equity. He has made some recommendations for 2023 corn because the return is very good.

“Fertilizer prices are expensive but we also learned that as a response to these high prices, manufacturers around the world responded and prices have been coming down,” Beadle noted.

When you pair 2023 corn prices with fertilizer that is somewhat cheaper, it still provides a great return which can be locked in. During this growing renewable diesel situation, Beadle does not like selling 2023 soybeans at these prices. The 2023 beans are on the back side of a fairly steep inverse.

CHS Hedging and AgSurion Risk Consulting provide professional risk management and hedging services.


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