Farmers who wish regularly for a pretty crop of corn need to add a second item to the list: market prices that cover the cost of producing that crop.
Those operating at either end of the weather spectrum – dry or flooded – might wonder why commodity prices aren’t moving. Hedging strategist Tyler Schau, of AgMarket.Net, was wondering the same – until earlier this month when he drove across a good chunk of the Mid-West
He and his wife drove from their home in western North Dakota across to the Ozarks.
“From Bismarck, ND, to Brookings, SD, it would be one of those corn crops that's a little bit below average, subpar. We're behind. We haven't had enough heat. And I wouldn't tell you that the crop looks outstanding in North Dakota or the northern half or even two thirds of South Dakota,” Schau reported on Ag Marketing IQ In Depth. “But as soon as we got to Sioux Falls and crossed the I-90 line, I don't know that I could tell you that I saw a poor stand of corn from I-90 all the way to Wichita, Kan.”
That is way above normal, he said, to have a stretch that long “where you've got just a really, really good-looking crop.”
Since then, Schau said: “Most of those areas have continued to see beneficial rainfall over the last week. And for the most part, we haven't seen those scorching temperatures, and we've cooled off a little bit in the evenings.”
Though many farmers didn’t get the rain or saw too much rain, Schau said, “as a whole, you've just seen as good a growing season for a very large portion of the Corn Belt as we've seen in the past few years and couple that with 95-plus million acres of corn that went in the ground and the market's just looking for a very large supply to come off the combines as we roll into fall.”
What that means is price opportunities may already have come and gone. Schau didn’t shy away from difficult truths: "I would rather come on here and tell you that they're [prices are] going much, much higher, but I just don't think I'd be doing anyone any justice if I did so."
So now what?
How to maximize price?
The way to maximize price, Schau said, is to play money ball. “I try to remind people this is a long-term game, and we might be having to make some sales that don't look all that great. On a per-bushel profitability basis, it’s not going to look like it did in 2022 and early 2023. We've got to come back and get back to basics here … because the bottom line is, whether we have a plus trendline yield this year or not, it's still a lot of corn that's got to find a home.”
And pretty fields mean more bushels to sell – even if the price is low.
Hear what else Schau has to say about setting a floor, where the highs hit the market and how to salvage sales on Ag Marketing IQ In Depth.