Introducing Top Tips on a Thursday
It happens to an extent every year, but 2026 is already shaping up to be a complicated one for grain marketing. There are a lot of moving parts, both domestically and globally, which have led to ample price volatility, with the promise of plenty more on the way.
That’s why we are launching our new “Top Tips on a Thursday” feature at Farm Futures. A rotating roster of grain market analysts and other experts will address what farmers should be focused on right now – and what they can do about it.
In the inaugural edition of Top Tips, you’ll get a chance to see what everything from El Nino to New World screwworm, shipping costs, planting trends and much more could affect your bottom line. We’re invested in helping you protect your profits, and Top Tips is another tool in that toolbox.
- Learn why you should be paying attention to carry in the market.
- Should you be worried about a widening of basis due to increased shipping costs?
- PLUS: New World Screwworm discovery in Texas means it’s time to seriously hedge production for later this year.
Owen Wagner, Rabobank
“In a market that’s been hungry for good news, this is the closest thing we’ve got in three or four years, so let’s embrace it. We don’t want to sugarcoat all of the challenges we’ve been through, but as tough as we’ve had it in the United States, we are in many ways the best house in a bad neighborhood. Other parts of the world are much more reliant on energy and fertilizer out of the Persian Gulf.”
“Now we have a compounding factor of what could be a strong to very strong El Nino by mid to late summer. They don’t have predictable, consistent negative impacts on agriculture in the United States. There has been a trough in the commodity cycle that’s pushing four years now. That’s quite a bit longer than a typical downturn. Typically, it would take a geopolitical shock or weather event to break through a trough, and we would argue that those ingredients are in place for some kind of meaningful market correction.”
“Here’s where things get tricky. You have to place your bets on how things will play out. If we look at the prices of U.S. commodities relative to other key exporters, our product does still look fairly expensive, with the exception of corn. When U.S. product seems expensive, that’s a good indicator to get some risk off the table if you can lock in some sales at a profit.” - Owen Wagner, senior grains and oilseed analyst, Rabobank
Brady Huck, Empower Ag Trading
“Markets may not always be moving the direction we want them to, but there are still steps we can take. We need to be paying attention to carry in the market. In corn futures, carry has been expanding much of the spring, with 2027 futures’ adding premium over 2026 prices.”
“Those with on-farm storage have ability to take advantage of movements in futures spreads by strategically placing futures hedges in the correct month, meaning the months that offer the best return on storage. After the hedge is in place, we can adjust the position as basis and spreads tell us when and how to manage the cash bushel or the futures hedge. Capturing carry starts with a hedge in the right month. Everything after is just the market telling you how to manage the grain.”
“Producers should look at placing hedges based on March 2027 futures, picking up the roughly 15 cents of market carry (as of early June) over December futures, or 5 cents per month and waiting for the March 2027 to July 2027 spread to offer enough incentive to store the grain longer. If the spread between March 2027 and July 2027 does not widen further, basis is likely attractive and telling you to move the grain. If the carry does widen, basis is likely softening and you will be further incentivized to capture the better carry to July.” - Brady Huck, principal and advisor, Empower Ag Trading
Mark Knight, Farmer’s Keeper
“I'm betting that acreage number is even bigger and more bearish when it’s all said and done. I've talked to hundreds of farmers, and while most had their fertilizer for corn locked in last fall, many others didn't, and thus decided not to chase prices after the start of the war. Remember, for USDA’s March planting intentions, most survey response were collected before the spike in crude and fertilizer prices. So, I believe there will be an upside surprise in soybean plantings, likely 1 million to 2 million more acres.”
“One possible move to consider would be buying put options, such as the November $11.30 put that currently costs about 25 cents (or $1,250 for every 5,000 bushels you protect). If you can tolerate a little more risk, I would sell $13 calls against that position, thus creating a floor at $11.30, but establishing a ceiling at $13, for about 12 cents each ($600). You would be required to post some margin to accompany the selling of that call, but it’s currently less than $1,000.” - Mark Knight, farm marketing consultant, Farmer’s Keeper
Mike Pearson, Farm Progress
“New World screwworm discovery in Texas could be changing the math in the cattle complex. Now is the time to seriously hedge production for later this year. The trade is much higher today on expectations that NWS is another challenge to herd rebuilding – keeping supplies tight and prices strong.”
“But the wildcard remains the consumer’s willingness to buy. Watching demand for rib and loin primal over the next few weeks – that’s steakhouse/high dollar retail demand, and it might be the first indicator of a consumer tired of high gas and high grocery prices. If supplies do get tight and buyers stay strong; additional records could be ahead of the feeder market; but if consumers get skittish with massive net longs from managed money – that’s a lot of downside risk to price into a thin market.” - Mike Pearson, broadcast director, Farm Progress
Vitor Gaspar, XP Inc.
“For grains, carry markets are mainly about the economics of holding inventory: storage, financing, logistics and expected availability over time. When deferred contracts trade above nearby contracts, the market is effectively paying participants to store grain and carry it forward.”
“At a high level, an expanding carry usually tells me the market is not bidding aggressively for immediate ownership of corn. It suggests the nearby balance is relatively comfortable, or at least that the market believes there is enough supply available today and is willing to pay someone to hold inventory forward.”
“For farmers, I would frame the takeaway less as ‘carry is bullish or bearish’ and more as ‘the market is putting a value on storage.’ The practical question becomes: does the spread compensate me for storage, financing, shrink, insurance and execution risk, and do I expect basis to improve enough to justify holding the grain?” - Vitor Gaspar, commodities trader and advisor, XP Inc.
Angie Setzer, Consus Ag Consulting
“Right now, I hate that the market is down as hard as it is, but you have to take a full-on assessment of what you have, where you’re sitting and what you need to accomplish ahead of harvest. Most farmers don’t think about their non-negotiables until they’re right in front of them. Knowing those non-negotiables are obviously your space and cash-flow needs. What are the constraints on your operation, and how does this movement in the market affect those? Are there things you can accomplish relatively well under these parameters?”
“On the flip side, if you’re a farmer that’s also a feeder, or if you have some other things that need to be taken care of while the market is a little bit lower, now is the time to be looking at that. Write down your constraints and take the time now when you’re not necessarily having to make those decisions at this very moment so you can build out a plan of how you need to handle them.”
“$4.50 December corn feels terrible comparatively speaking, but if you think about where spreads typically trade, your local basis tends to improve as you work through the wintertime. Now is the time to still be thinking about writing contracts, potentially. Maybe you hold your nose and sell a little corn if you’re behind the 8-ball. If you have no ability to work around that, sometimes you still have to make some of those tough decisions. But now is the time to take a step back and assess if you have to, or if you’re going to have to.” - Angie Setzer, partner, Consus Ag Consulting
Tanner Ehmke, CoBank
“Weather is becoming less of a concern for corn and soybeans, and the market has baked in how small the winter wheat crop is, especially HRW. So now we’re waiting to get further into the growing season, but there are no concerns on the weather front yet.”
“Right now, it’s more the story of how the U.S. is the most expensive grain in the world. We do have rising domestic demand that’s going to replace some of that export demand. We have record ethanol production and record soybean crush. The one additional headwind for us is rising shipping costs. If the shipping market gets really competitive and vessels get scarce, agriculture is typically going to be the loser there. In a supply-push environment, that’s going to widen out the basis. If you have old crop that you’re still wanting to sell and you’re not happy with the flat price, I would secure your basis before it gets wider. We are still in a weather market and there will be some hiccups, so if you want to roll the dice on flat price recovery, then there might be some opportunities on down the road.” - Tanner Ehmke, lead economist for grains and oilseeds, CoBank