Since the beginning of March, December 2023 corn futures have been trading in a very mild 20-cent trading range. The market seems to be content with holding steady in the short term.
On the supply side, the United States is still dealing with nine grain and oilseed commodities with historically tight old crop ending stocks, just like last year. So, the importance of a perfect spring for planting corn, and great weather this summer is paramount in order to improve supplies.
Looking ahead, the U.S. corn market is anticipating a potentially large 92 million acres of corn to be planted this spring, according to the information the U.S. Department of Agriculture gave us from the March 31 Perspective Plantings report. This notion is keeping any rally on corn in check. 92 million acres of corn would truly help alleviate tight supplies come harvest.
However, the market is also very well aware that of the 3.41 million increase in acres this spring (compared to 88.6 million acres planted in the spring of 2022), 1.3 million of that increase of acres is expected to come from still snow-covered South Dakota, North Dakota and Minnesota. Trade is starting to get nervous that for those three states, an early spring may be unlikely.
Some producers are likely at or near breakeven now with new crop corn. Will prices continue to trade sideways? Will prices rally into summer? Time will tell, but I encourage you to be aware and use the seasonal grain tendencies to your advantage this spring and early summer and be more aggressive to capture and lock in prices early.
Looking back at the past 15 years, the new crop December corn futures summer price high does have a tendency to move around:
• Four out of 15 years, the high occurred during the month of May.
• Six out of the past 15 years, the high occurred in June.
• Five out of the past 15 years, the price high for new crop corn occurred in July.
Often times, the price high will occur when you’re busy in the fields finishing up planting. Often times, during this time frame, the last thing you’re thinking about is marketing your grain, because you’re just hoping it comes up out of the ground. But mark it on your calendars now and be ready to pull the trigger on sales.
Please make time today to think about where your current cash sales are, how much grain you have forward contracted, and consider potentially protecting the value on any remaining unpriced bushels of grain. Also think about that 2024 crop, too.
It is rare for a bull market to last more than two years. Be confident with your cash marketing skills and forward contracting. Also, this is going to be the year to understand various put option strategies to protect unpriced bushels for 2023 and potentially beyond.
If you have questions, you can reach Naomi at [email protected] or find her on twitter @naomiblohm.
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