It was a week of optimism at Commodity Classic as higher prices have marketers excited about the prospects of the 2021 crop.
While the convention was held virtually this year, the same idea was hit by many analysts speaking at the event: watch crop acres. Al Kluis, with Kluis Commodity Advisors, said finding the right acreage that will maximize yields is key for a successful 2021.
“Plant an acreage combination that allows you to maximize yields,” Kluis said. “Don’t swing your acreage one way or the other to take advantage of the market rally. Both corn and soybeans offer good profits for 2021.”
Both soybean and corn acres are expected to increase this season as farmers look to take advantage of the higher prices in the market. Cody Bratland of Kluis Commodity Advisors said corn acres are expected to rise by 1 million acres nationwide this year, for a total of 92 million acres, while soybeans could see a jump as high as 7 million acres to 90 million total.
With last year’s soybean crop being slightly smaller than anticipated and increased demand for the U.S. crop, Bratland said the stocks-to-use ratio is near 10.3%, a mark they wouldn’t have expected at this time in 2020.
“The market doesn’t like it when we get to 10%, and we are knocking on the door,” Bratland said. “It doesn’t take too much to see the change we’ve got.”
Following that sentiment, both Kluis and Bratland encouraged farmers to take advantage of the current price levels, but be wary that weather could change the market sentiment quickly.
“This spring is sure to be very volatile, and any weather events are sure to play into it,” Bratland said.
Kluis said not to plan for too much additional revenue in the form of USDA payments, so managing revenue is going to be especially important.
“Do what you can to manage input costs,” he said.