Spring is just around the corner, and soon you will be focused on getting those planters ready for the fields. In the weeks before spring officially arrives and your busy season begins, take time now to scenario plan for the potential grain marketing opportunities that could occur this spring and summer.
What’s happened
Grain prices have enjoyed an unforeseen rally in early 2025 thanks to an unexpectedly friendly January USDA WASDE report that created a suddenly friendly tone for grain prices. But where to from here?
It is time to plan based on various scenarios that could unfold and get your action plans ready.
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. At our firm, we call this Market Scenario Planning.
We cannot outguess what the market will do. Therefore, Market Scenario Planning is a way to prepare to take action should the market climb substantially higher due to poor weather in South America or the U.S. And be equally ready to move if prices drop due to a big South American harvest or a Black Swan curbs demand.
From a marketing perspective
The supportive fundamental tone for grain commodities and prices is a far cry from the negative price outlook the industry was forecasting just a few months prior to the last WASDE.
Looking forward, traders will be watching for any tidbits of fresh fundamental news that might continue to allow the corn market to rally, or trigger funds to exit their massive short position in wheat.
The end of February and the entire month of March will bring plenty of news:
- the USDA Outlook Forum
- Another Fed meeting regarding interest rates
- The twists and turns of geo-political events
- The March 11 USDA WASDE report
- Weather reports from Brazil on the safrinha corn crop
- The March 31 Quarterly Stocks and Prospective Plantings report.
Which way will the pieces of news ultimately fall and tip the price scale? Will prices race higher due to lower supplies, strong demand, and adverse weather in South America? Or will a snafu in global economics or global geopolitics spook prices lower?
My advice: Make a strategy that prepares your farm for either scenario. Don’t wait and see. Be ready to act.
Prepare yourself
As a marketer you gather information, strategize that the market will trend in a particular price direction, and create a marketing plan to act accordingly. For example, let’s say you have a “Hedge to Arrive” order in with your elevator that should new crop (December ‘25) corn futures trade at $5, you’ll sell 10,000 bushels. You feel good. You have a plan!
Suppose though that the futures price trades only up to $4.99, never hitting $5, and your order is not filled.
Then, the market pushes lower. You have no contingency plan, the market goes the “wrong way,” and you have no plan in place to respond. You are left reeling and frustrated.
Good marketers have contingency plans in place, so they can act when they see opportunity or protect themselves against tumbling prices. How does a marketer create a scenario plan?
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 exercising discipline.
It may seem like a daunting task to learn how to scenario plan. However, the best of the best are already doing it. Scenario planning is the process of creating possible future outcomes: sharply higher markets, markets that stay low for two years at a time, markets that stay consistent but are coupled with input costs that might fluctuate drastically.
I don’t have to tell farmers how to manage through contingencies. You do it every day on your farm with your daily activities. Now you have a picture of how to apply that skill to commodity marketing. It’s what the best marketers will be doing in the year 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.