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The Grain Markets

Aurora Cooperative 2 months ago

To recap the last month, we have seen old crop corn traded as high as 7.66 with a pull back down to 6.80 and a current market in the middle of that range. Beans started out the month at 16.30 and after a 1.50 rally currently trading 17.80+.

There is plenty of supportive markets right now including crude oil, natural gas, ethanol, and diesel that have all hit new highs within the last 30 days. When you combine that with a war between Russia and Ukraine and late planting/replanting in the corn belt, it is easy to be optimistic about the price of grain. With that being said, I think it is important to take a step back and look at some historical data on past years.

July and December futures typically top out mid-June and with the current prices of new crop corn right at the 50-day average and only 6% off the highs, I would highly consider locking in these current prices. I feel the perception in the market is new crop corn has pulled well off the highs and when you compare the 6% pull back in new crop corn to a Dow Jones trading 11% off the highs, things might not be as stale as you feel.

Trying to time the top is never easy, nor suggested. However, while we look at these seasonal charts below it wouldn’t be a shock to me if the highs are in. There’s a few different option strategies or cash contracts that are good risk management tools at this point. Call your local grain merchandiser to help learn what we can do for you.

Sam Johnson

Grain/Ethanol Hedge Desk Manager