Top Tips on a Thursday
Grain prices took a beating last week and have seen mixed results so far this week ahead of today’s WASDE report from USDA. But experts for the most part suggest farmers go slow on pricing grain right now.
That’s just one small piece of advice in this week’s edition of Top Tips. It’s also important to keep the past in the past and look ahead to future opportunities. “Don’t let regret dominate your decision-making bandwidth,” as David Widmar with AEI put it. Experts encourage farmers to manage your existing hedges deliberately – and offer tips on how to do that.
Keep reading for other action items to consider this week!
- Will China buy 25 MMT of U.S. soybeans for the next marketing year?
- Consider protecting unpriced bushels with put option strategies
- PLUS: Be mindful of a genuine global scarcity risk for phosphate this year.
Naomi Blohm, Total Farm Marketing
“Grain prices have tumbled lower from the May price highs due to a rapid planting pace in the United States, good weather outlook in the U.S. Midwest, great crops in Brazil and Argentina, and a Middle East situation that had been de-escalating. This all contributed to fund selling and seasonal selling, which escalated the technical selling.
“The sell off is technically overdone, and a price recovery bounce may be likely in the week ahead. But take note, while past performance is not indicative of future results, there is a strong seasonal tendency for corn and soybean prices to fall lower after Father's Day weekend (barring any disparaging weather outlook for July).
“That seasonal sell off can last into mid-August before prices find a significant price low. Your action item is to be mindful of making additional cash sales should there be a technical bounce higher in the coming week – both old and new crop – and consider protecting unpriced bushels with put option strategies.” – Naomi Blohm, senior market advisor, Total Farm Marketing
ACTION: Be ready to make cash sales into a potential technical price bounce next week.
David Widmar, Agricultural Economic Insights
“After the grain market rally and retreat in recent weeks, it’s tempting to wish more bushels had been sold. Don’t let regret dominate your decision-making bandwidth. In any given week, producers only have so many hours - or minutes - to devote to their marketing decisions. That time is especially limited during the growing season, when dozens of things compete for their attention."
“The early growing season is also a great time to update budgets to reflect actual production costs. With updated breakevens, the attractiveness of current market prices can be anchored to your production costs, not where prices were two or three weeks ago.” – David Widmar, ag economist, Agricultural Economic Insights
ACTION: Update crop budgets to reflect actual production costs.
Dan O’Brien, Kansas State University
“The price drop we saw last week did shut off a lot of farmer selling. But don’t kick yourself that you didn’t sell two weeks ago. If anything, we’ll probably be too quick to sell on any rallies. As an action step, I think it still behooves you to sell when it allows you to cover not just the cash cost, but the full economic cost. One good thing about low prices is it may end up lowering the cost of call options. If someone has an idea to price later on in a rally, it’s a fairly good time to buy call options. So, you’re buying something that puts you in position to use later on rather than right now. I remain optimistic that we’re going to see prices rally back with a quick recovery. When that happens, I’m not sure. But I wouldn’t get in too big of a hurry to price anything right now.” – Dan O’Brien, professor, Kansas State University
ACTION: Sell when the price covers your full economic cost.
Sam Taylor, Rabobank
“My personal view would be that we’re going to see some price upside on nitrogen through the latter part of the year because what’s happening now is a bit of an overreaction. Demand destruction is the key catalyst there. I would probably move on any buying opportunities, but the problem is there might not be any volume available because retailers are not carrying extra inventory right now. And I think phosphate prices will keep climbing up, and we might not see the peak in 2026. There is a scarcity of global phosphate right now – it’s a genuine scarcity risk that will be with us into 2027.” – Sam Taylor, farm input analyst, Rabobank
ACTION: Move on opportunities to buy nitrogen.
Chase Koopmans, The Grain Ledger Rundown blog
“After last week’s selloff, here's what I'd be doing if I were sitting on unpriced bushels. Know your local basis and what it normally does this time of year. The disciplined alternative isn't to bet everything on one outcome. Sell a portion as cash to stop the bleeding and generate cash flow. Establish a put option floor under another portion to protect downside while staying open to a rally. Leave the rest open as your ‘rally bet.’ Spread the risk across several smaller decisions instead of one big one.
“Manage your existing hedges deliberately. Speculators have been liquidating aggressively. A short-covering bounce wouldn't surprise anyone here, but if you're carrying short hedges, treat the bounce as a chance to reassess, not as a confirmed bottom. Forced-liquidation rallies tend to be relief, not reversals.
“Above all, know your breakevens. Every marketing decision is downstream of that number. If today's cash price puts you above breakeven, take some off the table in pieces. If you're below breakeven, don't freeze — make a deliberate decision about what mix of cash, puts and open position fits your operation. Inaction is its own decision, and often a costly one. The farmers who do well over time aren't the ones who guess the top — they're the ones who consistently sell at profitable prices and don't let unpriced bushels sit indefinitely while costs accrue.” – Chase Koopmans, Iowa farmer and advisor, The Grain Ledger Rundown blog
ACTION: Know your local basis and what it normally does this time of year.
Susan Stroud, No Bull Ag
“NOAA now puts the odds of El Nino developing by mid-summer 2026 at 82%, with a 96% chance it remains in place through winter. And while it’s too early to confidently call a ‘Super’ El Nino, the risk of a very strong event is on the table — something we’ve only seen a few times in the modern era, including 1982–83, 1997–98, and 2015–16. But El Nino doesn’t hit every crop — or every region — the same way.
“The biggest mistake U.S. farmers can make is assuming the potential development of El Nino automatically means a ‘weather’ market. Historically, El Nino events have generally been favorable for U.S. agriculture, often bringing improved moisture and drought relief to parts of the Plains and southern U.S. However, the strongest U.S. impacts typically occur during the fall, winter and spring rather than during the peak summer growing season.
“Rather than making marketing decisions based solely on an El Nino forecast, producers should focus on how weather is actually evolving in their local area while keeping an eye on regions where El Nino has historically created production risk, including Australia, India and Southeast Asia. Weather problems in those areas can have a meaningful impact on global grain and oilseed markets even if U.S. crop conditions remain favorable.
“From a risk management standpoint, periods of weather-driven volatility often create opportunities to establish floors while maintaining upside participation. The goal isn't to predict the weather or the markets — it's to protect profitability when opportunities present themselves.” – Susan Stroud, analyst and CEO, No Bull Ag
ACTION: Don’t count on El Nino-driven weather rallies. Protect profitability by establishing floors.
Arlan Suderman, StoneX
“Whether China steps up for additional U.S. soybean purchases will be one key to the soybean market’s direction this summer. China has mostly completed near-term purchases totaling 12 MMT (441 million bushels) that followed a trade truce with the U.S. reached last October. Whether China follows through on 25 MMT in annual purchases over the coming three years, as the White House has touted, remains an open question.
“China holds the ‘trump’ card for the soybean market in the months ahead.” Following the Phase One trade agreement reached during President Trump’s first term, China ended up buying only about 60% of what it had committed to purchase.
“Will (China) buy 25 MMT of U.S. soybeans for the next marketing year? “U.S. beans “are priced too high” relative to competing supplies from Brazil and China’s reserve “doesn’t have room for more soybeans now.” – Arlan Suderman, chief commodities economist, StoneX
ACTION: Watch China but don’t count those purchases until they’re made.
John Zanker, Farmer’s Keeper
“Weather forecasts are showing no major areas of concern outside of the far western Corn Belt. I am expecting a rebound going into the end of the month but my confidence in that isn't overly strong. For farmers, the grain market’s extreme downdraft is very difficult. We have often seen markets that started to fade after planting season, but then a weather scare came along and prices rebounded. It’s hard to just say, ‘hang on, better prices are ahead.’ This is an exceptionally difficult environment to navigate.”
“The odds favor some sort of weather scare developing the next few weeks, and I’m hanging my hat on the idea corn plantings in the June 30 Acreage report will fall sharply, maybe 2 million to 3 million acres. If that doesn’t happen (corn prices) are probably going to be below where we are now.”
“I don’t think farmers can afford to wait if they don’t have any sales on the books. They just need to pull the trigger because it could get worse. If that acreage doesn’t come down and we get above trend yields we’re going to test the $4 level this fall. For soybeans, let’s not turn our nose up at $11.40 November futures, which is above our $10.80 average break-even estimate. But if acreage is up 3 million, we could see a 9 in front of bean prices this fall.” – John Zanker, senior analyst, Farmer’s Keeper
ACTION: Don’t wait to get sales on the books.
DuWayne Bosse, Bolt Marketing
“I think we are starting a bullish cycle. I do think we have a deal with China. I do like all the biofuel news. The problem is if we don't have a production scare to start the rally, we can absorb all this new demand that's coming in. That new demand from biofuel is slow and China's smart.”
“They could be stepping in here in the next couple of weeks, buying corn and soybeans on this dip. I don’t think the China deal means a higher high for prices. I think what it means is a higher low. China is smart that way. So, I'm friendly moving forward.”
“What I would do now is make a short-term courage call. I use the term courage calls because they give you the courage to go out and sell new crop when you can take a profit.”
“Here’s how to do it: buy calls at strike prices above the market. For example, $4.80 August short dated like we bought today for clients. The idea is that having a call above the market will give a farmer the 'courage' to sell on a rally to say $4.70 and higher. So, we are not making any sales today but setting it up so producers have confidence to sell on the next weather scare rally.”
“I want those calls in your back pocket so you can take advantage when prices go up, say on a hot, dry forecast.” – DuWayne Bosse, owner, Bolt Marketing
ACTION: Use short-term calls to sell a percentage of the 2026 crop.
Jon Scheve, Scheve Grain
“Several variables could impact corn prices in the next couple of months, including USDA’s June 30 acreage report, which will show if high fertilizer prices and corn futures values below the cost of production actually reduced total corn planted acres."
“Additionally, will there be any hot and dry weather conditions during the July pollination period, and will China buy any additional agricultural products as the White House said they would back in mid-May? Most likely, it would take two of these issues to create a significant corn rally.”
“While farmers wait to see which direction the market goes, it is important that farmers do NOT dump any grain on deferred pricing or other types of price later programs. These programs basically allow end users to ‘rent’ your grain without paying farmers for it. That in turn suppresses local basis values for everyone. I’m seeing basis values held back by nearly 20 cents per bushel or more at some end users because of farmers dumping grain on DP.”
“If farmers don’t like current prices, they should either wait for the price they want to haul their grain or haul the grain in and just price it now. About 80% of the time corn values in late August are lower than the prices in early June anyway.” – Jon Scheve, advisor and owner, Scheve Grain
ACTION: Avoid deferred pricing programs and, if unwilling to wait to give the market some time to recover, price some grain now