Corn and soybean producers should be looking at July futures now

Oct 17, 2017

Chris Hurt suggested some farmers could sell July futures at harvest

By Diego Flammini
News Reporter
Farms.com

If corn producers act soon, they could be locked in with favorable crop prices, according to Chris Hurt, a professor of agricultural economics at Purdue University.

During a webinar focused on the 2017 fall crop outlook, Hurt suggested some corn producers could lock themselves into July 2018 futures at about $3.71 per bushel.

“Markets need to give somebody an incentive to store that crop,” he said during the Oct. 13 webinar. “One way futures do that is the more deferred futures prices gain on the nearby futures. The bids for next summer are based on the July futures and those (have a) 30-cent premium (compared to) current prices.”

USDA estimates corn prices will be between $2.80 and $3.60 per bushel this year.

U.S. farmers will be carrying over what equates to 16.4 percent of the total corn crop into next year, which is why the markets are putting premiums on some futures, Hurt said.

Hurt offered a few suggestions for farmers with on-farm corn storage: take the carry at harvest, sell hedge-to-arrive futures at their buyers, or wait for a rally and then sell summer futures.

One reason for the increased corn inventory is the lack of exports.

Corn farmers exported almost 2.3 billion bushels of corn in 2016/17, compared to an anticipated 1.8 billion bushels in 2017/18.

“(There was) a huge crop, particularly in Brazil,” Hurt said. “We’re really going to compete with that crop as we are shipping and selling corn.”

Soybean producers could also sell their crop at a favorable price if they lock in their July futures soon, Hurt said.

Hurt estimates soybean prices for November and December could range between $9.62 and $9.78 per bushel. But looking ahead to July 2018, farmers could sell their soybean crop for up to $10.17 per bushel.

These kinds of opportunities don’t come around often, so farmers should act quickly, said Hurt.

“When (farmers) have a chance to sell beans (for) over $10 per bushel today for next summer delivery, that’s something I always think about,” he said. “When you can sell at the high end of the USDA price range, that’s something you can’t just dismiss. (Farmers) should be thinking about that.”

Another positive factor impacting U.S. soybeans is the export demand.

USDA estimates soybean exports will rise to 2.2 million bushels in 2017/18, up from 2.1 million bushels in 2016/17.

That kind of export demand is attributable to soybean’s uses, Hurt said.

“If you talk about soybeans, sometimes they’re regarded as the miracle crop,” he said. “We talk multiple years about the carryovers being so big and when we got to the end of the year, carryovers weren’t as big as they anticipated. It seems like soybeans find a usage base (which is) clearly driven by China.”

In July, soybean importers from China signed deals to purchase 12.43 million tonnes of U.S. soybeans, the second-largest deal for that crop.

Video: Why Your Food Future Could be Trapped in a Seed Morgue

In a world of PowerPoint overload, Rex Bernardo stands out. No bullet points. No charts. No jargon. Just stories and photographs. At this year’s National Association for Plant Breeding conference on the Big Island of Hawaii, he stood before a room of peers — all experts in the science of seeds — and did something radical: he showed them images. He told them stories. And he asked them to remember not what they saw, but how they felt.

Bernardo, recipient of the 2025 Lifetime Achievement Award, has spent his career searching for the genetic treasures tucked inside what plant breeders call exotic germplasm — ancient, often wild genetic lines that hold secrets to resilience, taste, and traits we've forgotten to value.

But Bernardo didn’t always think this way.

“I worked in private industry for nearly a decade,” he recalls. “I remember one breeder saying, ‘We’re making new hybrids, but they’re basically the same genetics.’ That stuck with me. Where is the new diversity going to come from?”

For Bernardo, part of the answer lies in the world’s gene banks — vast vaults of seed samples collected from every corner of the globe. Yet, he says, many of these vaults have quietly become “seed morgues.” “Something goes in, but it never comes out,” he explains. “We need to start treating these collections like living investments, not museums of dead potential.”

That potential — and the barriers to unlocking it — are deeply personal for Bernardo. He’s wrestled with international policies that prevent access to valuable lines (like North Korean corn) and with the slow, painstaking science of transferring useful traits from wild relatives into elite lines that farmers can actually grow. Sometimes it works. Sometimes it doesn’t. But he’s convinced that success starts not in the lab, but in the way we communicate.

“The fact sheet model isn’t cutting it anymore,” he says. “We hand out a paper about a new variety and think that’s enough. But stories? Plants you can see and touch? That’s what stays with people.”

Bernardo practices what he preaches. At the University of Minnesota, he helped launch a student-led breeding program that’s working to adapt leafy African vegetables for the Twin Cities’ African diaspora. The goal? Culturally relevant crops that mature in Minnesota’s shorter growing season — and can be regrown year after year.

“That’s real impact,” he says. “Helping people grow food that’s meaningful to them, not just what's commercially viable.”

He’s also brewed plant breeding into something more relatable — literally. Coffee and beer have become unexpected tools in his mission to make science accessible. His undergraduate course on coffee, for instance, connects the dots between genetics, geography, and culture. “Everyone drinks coffee,” he says. “It’s a conversation starter. It’s a gateway into plant science.”