Top Tips on a Thursday
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Jon Scheve, Scheve Grain
“USDA essentially kicked the can down the road with Tuesday's acreage report. The market will now have to wait until at least August, when the USDA can review insured acreage data, to get a better estimate of how many corn acres were actually planted.
“According to the USDA, there is a 90% probability planted corn acreage falls somewhere between 93 million and 97.7 million acres, which is an enormous range. At the low end, corn futures could easily trade into the mid-$5s. At the high end, prices could slip below $4. In other words, there is still a tremendous amount of uncertainty and price risk in this market. The cash market, with its stronger basis values, continues to suggest there is upside potential in the futures, but weather across most of the Corn Belt remains favorable. As long as that continues, it will likely keep a lid on prices over the next month.
“I would be cautious about selling old-crop cash grain and replacing it with call options unless a significant portion of your new crop is already marketed. Call options lose value every day the market trades sideways or lower, and early in a rally they often gain only about one cent for every three-cent move in futures. That isn't a strategy that has historically worked very well during the late summer. If you make an old crop cash sale today and prices rally later, that's not necessarily a bad outcome. You should still have plenty of new-crop bushels available to sell at those higher prices.
“Finally, avoid deferred pricing (DP or price-later) programs. Either sell the grain or continue to store it, but don't deliver it without establishing a price. Moving grain while leaving it unpriced allows the buyer to use your grain without paying for it and often contributes to weaker local basis levels.” – Jon Scheve, adviser and owner, Scheve Grain
ACTION: The acreage report didn't reduce uncertainty, it simply delayed the answer. Avoid strategies that cost money while you wait, and don't deliver grain without establishing a basis price.
Mike Zuzolo, Global Commodity Analytics & Consulting LLC
“Both USDA and EIA have reduced wheat and crude supplies since mid-month, as I had hoped they would. My analysis suggests that these two commodities represent the best gauges for overall commodity sentiment by investment funds-managed money funds related to futures. U.S. all wheat acres were reduced to 42.7 million acres, and Canadian all wheat acres were reduced 6% by Statistics Canada versus 2025. World supplies are likely falling and the funds have turned net-short in SRW Wheat Futures. A similar, more stark supply concern has been presented for U.S. crude stocks. The SPR is now down to its lowest level since 1983, yet 'the funds' have reduced their net-longs by about a third from the recent peak. It would seem to me that the investment funds may be out of position by being as negative as they were after the mid-May highs.
“Producer-clients are fearing a repeat of lower row-crop prices until August. But given the wheat and crude analysis above, when I see record-setting heat in Europe help push Paris Corn Futures toward $7 per bushel. I think there are ample fundamental reasons for corn & soybeans to de-couple from their trends in the month of July in both 2024 and 2025 – especially if the 'Godzilla El Nino' begins to take hold in Southeast Asia. That’s what I’ll be watching for after coming back from the 4th of July holiday.” – Mike Zuzolo, founder, Global Commodity Analytics & Consulting LLC
ACTION: Record-setting heat in Europe could help move the needle higher for grain prices in July – keep an eye on pricing opportunities if this happens.
Matt Wiegand, FuturesOne
“Now that grains are past the attention-grabbing stocks and acres report with little material change to row crop acres and a mildly positive corn stocks number, we are seeing trade move towards addressing the oversold conditions that have developed over the past month. As we progress into July, weather will become more of a driver, both on the U.S. and world scene as the heat wave in Europe has helped to push grain prices there, and in the U.S. we head into the thick of pollination season, albeit it starting from a strong base of overall conditions.
“Corn demand has held up well with ethanol runs still strong, and the overall export shipping gains reflected in the stocks numbers yesterday, while soybeans will need to see crush margin gains again along with further export confirmation to drive further fund interest in short covering. The strong dollar and sliding energy prices will likely help to keep fund short covering interest limited short term, but the oversold conditions that have developed can quickly transition into short term rallies if they feel it is time to cover to protect profits into the new quarter with consecutive positive closes a step in that direction. Wheat harvest pressure should continue to ease as we move past the halfway point there as well.
“As we head into the second half of the year, the main focus for producers will need to be on wrapping up any remaining old crop bushels before we transition to the harvest basis environment when the market provides opportunities via fund activity and/or weather movement, along with assessing remaining harvest needs for new crop to reward rallies to avoid forced decision making at harvest time. We have seen a volatile market so far this year, and that is unlikely to cease with ongoing political and trade questions around the world, along with Mother Nature, and that will likely put some opportunities in play for producers on both futures and basis ahead of combines rolling this fall.” – Matt Weigand, risk management consultant, FuturesOne
ACTION: Focus on selling opportunities for old-crop bushels sooner rather than later – those decisions will be tougher when harvest arrives.
Mark Knight, Farmer’s Keeper
“The corn market is desperately trying to find a bottom, but I think it will take a close above $4.50 in December to confirm that. I still don't see a ton of price downside from here. I’d hold off making any sales until we see some price improvement. If you have old-crop supply that has to go, re-own it on the board.”
“For soybeans, USDA's acreage and stocks numbers were close to expectations and not as bullish as the corn numbers. I'm still surprised by the resiliency in soybean prices, considering we were hedging this $11.50 area in November futures months ago, prices are significantly higher than last year, and we have more than 4 million more planted acres than last year. – Mark Knight, Senior Analyst, Farmer’s Keeper
ACTION: Buy September corn futures, and/or on the options side, I suggest going long the September $4.30 call option at 13 cents or better. For soybeans, I like buying the November $11.20 put option and selling the $12.60 call for 13 cents. I also like owning the September $11.20 put at 18 cents or better.
Hunter Swisher, Phospholutions
“While fertilizer markets remain influenced by ongoing supply chain adjustments, geopolitical uncertainty and shifting global trade dynamics, the question for many growers is how to maximize the value of the phosphorus they purchase in this environment. As margins tighten, success is increasingly determined not simply by fertilizer price, but by how effectively applied nutrients contribute to crop performance and profitability.
“One of the most important exercises heading into fall is taking a fresh look at phosphorus requirements using current field data rather than relying solely on historical rates, practices and products. Soil test results, crop removal rates, yield history and fertility goals can help determine not only how much phosphorus is needed, but where phosphorus investments are likely to generate the greatest return. With that foundation in place, the next question becomes how to generate more value from the phosphorus being applied. More growers are evaluating approaches designed to improve phosphorus availability, utilization and overall nutrient productivity as they look to maximize return on investment.
“Local trial data and on-farm performance results can provide valuable insight into which approaches are delivering both agronomic and economic benefits under real-world conditions. As input costs remain a significant consideration, solutions that improve phosphorus productivity, reduce input exposure, and maintain performance are becoming an increasingly important part of the phosphorus conversation.” – Hunter Swisher, CEO, Phospholutions
ACTION: Don’t rely on historical rates for phosphorus – you need to look at more current field data instead.
Tyler Roys, AccuWeather
“The greatest influence from El Nino won't be seen until starting this Autumn and continuing through the following spring. In the United States, the greatest risk for drought will be in the Pacific Northwest, northern Rockies and parts half of the Corn Belt. Globally, the greatest risk for drought includes the coffee areas in Vietnam, Indonesia, the crop lands of Central America, the wheat areas in Australia and from Russia and Ukraine and across northern Europe. There is already ongoing drought across northern Europe.
“El Nino is not a storm nor a weather event. It relates to pattern changes globally that can impact the world. Not all El Ninos are the same, therefore the outcomes are not always equal. A significant portion of the Pacific Northwest and northern Rockies are already in a severe to extreme drought. Chances for improvement in this area during the autumn, winter and spring months, during the peak of influence, are quite low. Instead, the drought in these areas are likely to intensify over the next year.” – Tyler Roys, senior meteorologist, AccuWeather
ACTION: Each El Nino is unique, so you can’t depend on a specific outcome. Still, pay attention to areas that are already being affected, such as ongoing drought across parts of Europe, which could diminish grain production there.
Tanner Ehmke, CoBank
“Wheat is struggling with a multitude of bearish factors at the moment that cloud the long-term supportive factors of world wheat acreage declining and world demand climbing to a new record. Although it’s discouraging to see the flat price of wheat down, the calendar spreads are narrowing substantially – a tell-tale sign that the market is getting worried about future supply.
“U.S. hard red spring wheat in particular may be undervalued with both the U.S. and Canadian crops expected to be smaller and with millers potentially needing more spring wheat to blend with the smaller hard red winter crop.
“Declining world wheat acreage for 2026-27 will put a stronger floor under all world wheat values longer term. Near-term, once the peak U.S. harvest selling pressure has passed in July, there will be more opportunities for prices to recover. Stocks will be notably tighter in the U.S. with world production also slipping, requiring the market to rein in U.S. exports via higher prices.” – Tanner Ehmke, lead economist, grains and oilseeds, CoBank
ACTION: Watch for new marketing opportunities in July and August as harvest pressure from the Black Sea and Europe subsides while market volatility increases for spring wheat as the U.S. Northern Plains and Canadian crops progress into the key yield-development phase.
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