Got corn in the bin? Those with corn in the bin are deciding if they should sell it or keep storing the corn in hopes of a potential price rally in corn futures in the coming months.
What’s happened
You’re busy with spring planting, yet you have corn in the bin that you need to price and move to town sometime over the next four months. The corn price is not overly attractive, yet according to the USDA, corn crop carryout is over 2 billion bushels, which justifies the lower corn futures prices for now. With plenty of moving parts happening behind the scenes with corn futures right now, here are a few important items to monitor in the coming weeks.
First notice day for May 2026 corn futures is April 30. That’s particularly important to two groups of people:
- Anyone who is long May 2026 corn contracts in the futures market needs to exit those long positions by the close of business on April 29 or be at risk of physical delivery.
- Farmers who were using basis contracts (based off the May futures contracts) for cash marketing must decide very soon to either price out the contract or roll it out to July. The question really boils down to: “Is there any bullish news out there?”
From a marketing perspective
May 2026 corn futures had a strong rally in late February and early March with the contract trading as high as $4.76 on March 9. Then over the course of one month, the May 2026 contract lost over 30 cents of that rally with prices now trading near $4.50 as of this writing.
Can prices recover and continue a summer rally from here?
The remaining business days of April trading will likely prove to be volatile as corn futures face continued potential conflict in the Middle East, fickle fund trading activity, May corn option expiration, and first notice day for May 2026 corn futures.
I’ll be curt: for grain prices to resume an uptrend, we need a drop in the U.S. dollar, continued volatility in the Middle East, hot and dry weather in Brazil on the second crop corn, and weather issues in the United States during July when the corn crop is pollinating. It’s hard to know what the future holds.
Still wondering what to do with your basis contract? Let’s take it a step further and look deeper at the notion of price or roll.
Price. If you are of the opinion that grain prices will trend lower, then it makes sense to price out the contract. This means that you will call the elevator, take the current May futures price and apply the basis already locked in. Boom. The decision is made, and the grain is priced.
For many, the current price is not glamorous. Others may already be thinking, “But what if prices do actually rally in the coming weeks!?” You may then potentially feel like you were “foolish” for pricing “too soon.”
Fear not. This is where it might make sense for you to re-own on paper with a call option.
If you purchase a July 2026 call option, it will expire on June 26. If you want more time, you can buy a September 2026 corn call option which expires on Aug. 21.
The cost is anywhere from 10 cents to 25 cents per contract for corn (plus commission/fees). If the futures market rallies, you have the ability to take part in the rally. If prices do not rally, the most you can lose is the expense(s) paid for the call option.
Roll. If you are of the opinion that prices will rally in the coming weeks, then consider rolling your basis contract. Most likely you will roll to the July 2026 contract, pay the elevator a fee to roll, plus the spread difference between the May and July contract.
If the market rallies, you will capture the futures price gain. If prices do not rally, then you are at risk of further price decline, and potentially cleaning out your bins near the harvest low price, which often times happens in late August to mid-September.
If you go this route, consider managing your price risk with a put option. This will help give you a price floor just in case USDA gives us a bearish report, the weather is perfect all summer, or the conflict in the Middle East wraps up sooner than later.
Prepare yourself
Many price scenarios can unfold in the coming days. Manage your risk. Be ready for any surprise. Sit down and do the math and decide which scenario, price or roll, is best for your farm business. If you have any questions, feel free to give me a call.
Reach Naomi at naomi@totalfarmmarketing.com or find her on X at @naomiblohm.
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