Play Turner’s Take Podcast Episode 211
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In this week’s podcast we go over the potential price ranges for corn based on realistic acreage and yield scenarios.  At 94mm acres and a 178.5 trend line yield, corn carryout could be close to 2.7 billion which suggests harvest lows at $3.20 or lower.  Spring and summer rallies have the potential to send corn between $4.00 to $4.20 in the Dec 2020 contract.  Make sure you take a listen to Turner’s Take Podcast!
Corn
Below is our 2020-21 outlook for corn.  We think acres will be 93mm and the trend line yield will be very close to 178.  In that scenario ending stocks are about 2.5 billion and harvest lows for corn could be $3.20.  Our most bearish scenario we have 94mm acres with a 181 yield (+1.5% over trend) and a carryout of 2.9 billion.  In this case front month corn could be $3.00 at the lows.  Our most bullish scenario right now is 92mm acres and 175 yield.  That puts corn just over 2 billion and price would be similar to where they are today with lows around $3.50.
The moral of the story is corn will be trading much lower next year if acres and yield are close to expectations.  We like selling the deferred contracts (Dec 20, March 21) and also bear spreading Dec 20 vs Dec 21.  I also like buying the Dec 20 $3.50 put and selling the $4.50 call for even money or better.
We realize corn production for the 2019-20 crop could come down. We expect yields to be lower but we also expect demand for ethanol and exports to be lower for this marketing year too.  A supply side rally from the Jan reports will most likely be selling opportunities.

Soybeans
Soybeans look a lot better than corn.  At 84mm acres and a trend line yield around 50, ending stocks are still in the 400s.  Our most bearish scenario is 600mm but that also assumes no trade deal with China.  Our most bullish scenario gets stocks to 350 but that also does not include a China trade deal.  A deal with China could add another 200mm bushels of demand to exports and during spring/summer rallies beans could trade $10. We are much more bullish on soybeans with respect to corn for next year.

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Craig Turner – Commodity Futures Broker
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