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Input costs throw more risk into 2022 grain marketing scenarios

A grain market expert says high input prices throw a lot more risk into the marketing equation in 2022.

Matt Bennett, with AgMarket.net tells Brownfield, “When you’ve got that much money invested in a crop your risk is just overblown, especially compared to last year when we put a cheap crop in the ground. This year it is not a cheap crop, so we have to be careful and understand whenever we are paying all that money for a really expensive crop, let’s lock in some of the other end of that too by making some sales.”

He says an 11-cent inverse in the corn market from March to July indicates buyers want corn now, and basis has been strong even after a record national yield.  

“A lot of folks look at those two facts and assume they will want my corn just as much or more later than they do right now, but you’re comparing facts with assumptions. I want to quantify as much of my worst case scenario as I can especially given the great situation that we are in.”

Bennett says there is potential for grain prices to move higher, but with more risk on the table, farmers should be careful gambling too much since current prices are still profitable.

Brownfield interviewed Bennet at a Farm Credit Illinois Fielding Forward Crop Insurance Meeting Tuesday in Mt. Vernon, Illinois.