Download Mid-Winter Comments on Grain Marketing Using current prices and

Mid-Winter Comments on Grain Marketing
Using current prices and our own estimates for production costs, the market is offering over $150 in
profit per acre on corn, and $100 per acre on beans, which is already well above historical averages. If
you haven’t sold any new crop, now would be a great time to get started. If you’ve already contracted a
portion of next year’s harvest, the next challenge is figuring reasonable targets for the remaining
bushels you plan to forward contract.
In trying to answer this question for ourselves, we studied the historical patterns for every crop year
going back to 1980. The graph below shows the average cash price curves for corn and soybeans
relative to their average prices in January each year, beginning with pre-harvest forward contracts
through sales from storage the next summer. The figure also shows the median high and low corn price
achieved relative to the January average.
• The highest prices for each year were more often achieved somewhere between March 15th and
the 4th of July during the summer before harvest than during any other marketing period.
• In 15 out of the 30 crop years, the maximum price increase achieved between January and April
was 5% or greater. However, during the same period it was just as likely that prices would fall a
similar amount by April.
This is not a price prediction or forecast, and should not be considered to be a recommendation.
However, the market probably won’t give us a signal when it’s time to get out, so please take positive
action when you’re presented with the opportunity to achieve your profit goals.