Where to Begin New Crop Sales?
FAPRI and USDA baseline projections, along with several estimates by private analysts, suggest average 2005 corn crop prices of $2.00 to $2.15 and $4.50 to $4.72 for soybeans. These estimates are based on assumptions using trendline yields and continued strong demand, resulting in the continued relatively high levels of corn and soybean ending stocks. Although many factors can alter these projections (weather, acreage, yields, use, etc.), they provide a starting point for market planning. Current new crop corn and soybean futures prices translate into fall cash prices near or below CCC loan price. At these price levels, the LDP provides downside price protection, assuming current program provisions with none of the proposed budget modifications. These currently available new crop prices could be enhanced with a large LDP if prices decline. However, with steady or higher prices, selling at current prices only protects prices at about loan price and the LDP already does that. Most produc
