Fear and loathing can spur hesitation. Hesitation can cause paralysis. Welcome to summer 2025.
It matters little who you ask: Most producers would gleefully accept the spring insurance level at $4.70 for December corn, and $10.54 for November beans. Yet at the time we were at those levels, human nature dictated that folks opt for something better—something more in line with breakevens, which seemed reasonably close. With a whole season still out in front of them, farmers waited patiently to allow that to develop.
- In late February, December corn reached a price of $4.79 three days in a row, topping out at $4.79 ¾. Many of you made disciplined sales that week. It wasn’t an exciting level, but it was a specific technical target at the time. If you were able to get 20% of your new crop sold above $4.70 CZ, you are in the favorable column for what this difficult year has provided marketing-wise.
- Sales for November Soybeans above $10.65 on 30% has you in that same favorable category. The most reasonable hedge floor back then was the December $4.50 puts, but most who hedged ended up with the December $4.40 puts. Though this was not viewed as a particularly attractive hedge, it was the available risk management level. If you are positioned on July 22 with that management footprint, you did as good a job as anyone.
Keep in mind, each year since 2001, December corn has managed to trade above its spring insurance level (this year, that would be $4.70) at some point during that year’s growing season, usually in the period from mid-May to mid-June.
This had been a reassuring factor as we saw early planting and timely weather keep the new crop 2025 futures under pressure through May and July expiration. And 24 consecutive years is a reliable historical trend—one that instilled faith in the idea of an eventual rebound. All we needed was that elusive hiccup in the forecast to shake the streak of idyllic widespread conditions and goose a building record fund short (for that time of year) into making their pain your gain.
The continued favorable weather through July 2025 has just about eliminated the potential for any crop-scare rallies, as pollination is progressing with essentially normal temperatures and rain events timed well in both the eastern and western Corn Belt.
High yields trump all
Many analysts are struggling to construct whatever bullish scenarios they can muster up. Factors to consider:
- Overnight lows are too high
- The trade is pricing in huge yields before the fact
- Possible trade deals that will reverse market trend
Beyond all of that, however, the idea of a 185 bushel-per-acre average yield is becoming more acceptable with every Monday afternoon condition rating.
September spot corn traded below $4 today. November soybean futures dipped below $10 in the past week. Are both markets undervalued relative to inflation-sensitive inputs like fertilizer? Maybe. But tell that to the funds who are more than willing to add to their winning positions if the market shows them another level to pile on.
If you have the capacity and will choose to store and ignore given the prevailing trends, you ought to consider protecting what may be a lot more bushels than you had last year. If you are going to be strapped for room and will be forced to sell a bumper 2025 crop at harvest, you might look back at current levels and wish you had treated today’s price a bit more respectfully and tried to capture what you could from $4.21 CZ and $10.25 SX.
Downside risk is your concern ($3.70 and $9.50). Upside takes care of itself (your crop). There’s no cut and dried salve for the situation right now, but making hard decisions while there’s still a “4” and a “10” on the board sure beats fear, loathing, hesitation …. And ultimate paralysis.
The risk of trading futures and options can be substantial. All information, publications and material used and distributed by Advance Trading Inc. shall be construed as a solicitation. ATI does not maintain an independent research department as defined in CFTC Regulation 1.71. Information obtained from third-party sources is believed to be reliable, but its accuracy is not guaranteed by Advance Trading Inc. Past performance is not necessarily indicative of future results.