The November USDA WASDE report had supportive underlying tones to it, due to lower-than-expected corn and soybean yields.
What’s happened
The report provided enough for a short-term price rally, which has unfortunately already dissolved.
“Now what?” A client recently asked me. The question posed sarcasm, philosophical tones and genuine curiosity regarding how grain prices might trade into year end and early 2025.
“I’m not totally sure,” I responded. “We need to be ready for anything.”
From a marketing perspective
As we head into year end, be mindful and ready to manage your grain marketing constantly in the coming weeks and early months of 2025.
U.S. grain ending stocks are viewed as adequate. Because of this, grain futures prices may struggle to find reason to rally triumphantly in the months ahead – barring some black swan supply or demand event.
Plenty of newsworthy items could offer market movement – either higher or lower. Traders will constantly be monitoring South American weather, global economic jitters, a new U.S. administration, inflation talk, the potentially slowing Chinese economy, and potential competition for planted acres in the Unites States this spring.
Which way will the pieces of news ultimately fall and tip the price scale?
Will prices rise higher due to unexpected lower supplies?
Will the U.S. crop get smaller on upcoming USDA reports due to the very low moisture content at harvest?
Or, what if there is adverse weather in South America?
Might we see an export demand uptick ahead of the new presidential administration?
Or will a snafu in global economics or global geo-politics spook prices lower?
My advice: Make a strategy that allows your farm to be prepared for either scenario. Don’t wait and see. Be ready to act on opportunity.
Start looking at technical charts for corn, soybean, and wheat markets now.
Know where support and resistance levels are on those charts, as they can create pricing opportunities for your cash sales.
Decide now where and when you want to pull the trigger on those cash sales.
Get those orders working with your grain elevator now.
Good marketers also have contingency plans in place, so they can act when they see an opportunity or protect themselves against tumbling prices. It takes a well-balanced blend of fundamental analysis, knowing your local cash market, weighing both U.S. and global economic news, watching geo-political drama, understanding technical charts and having discipline.
Prepare yourself
Scenario planning is the process of creating possible future outcomes: sharply higher markets, markets that stay low for two years at a time, or markets that stay consistent. Scenario planning is forward thinking. It’s preparing your farm for the unthinkable.
I believe that markets will continue to be volatile in the coming years, and often times, better pricing opportunities arise when markets are uncertain, rather than when they are certain. That means you have to manage through uncertainty.
You have to be ready with contingencies: sell, hedge, store, or whatever the appropriate action might be. Know your cost of production. Know where you’ll place target price orders to sell and review your marketing plan weekly. Be ready for anything; there is plenty of uncertainty ahead.
Reach Naomi Blohm at 800-334-9779, on X: @naomiblohm, and at naomi@totalfarmmarketing.com.
Disclaimer: The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation.