The soybean market had been rallying until Tuesday, eclipsing the $10 mark on the November contract. Did you take advantage of the rally?
Purdue ag economist Jim Mintert says futures prices aren’t providing any incentive to store soybeans as spreads are weak. Mintert has this recommendation for those who want to do some pricing but still think about storage.
“What you could do is place hedges in the nearby, the November contract, and watch those spreads as we go through the fall. Typically, they would widen out in late fall as harvest winds down and it comes to a conclusion, perhaps about the time the November contract is getting ready to go off the board or maybe as you move into the delivery month, and then if those spreads widen out you could roll those hedges forward and take advantage of the improvement in the spread. So, that would be one consideration to think about.”
Mintert, speaking to his colleague Michael Langemeier during a webinar after the September Crop Production and WASDE report, says corn spreads are much stronger and there is some incentive to store.
“I think the bottom line is, if you think about, ‘Do I want to store corn or soybeans right now,’ it looks like the returns would favor corn over soybeans. I think if you haven’t done much pricing, this looks like an opportunity to lock in at least a portion of your sales on soybeans based on this rally.”
Mintert and Langemeier have more recommendations in the full webinar that you can view above.