Top Tips on a Thursday
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Grain markets came out of the July 4 holiday weekend like a ball of fire thanks to forecasts for hot Midwest temperatures during the second half of July, right in the heart of corn pollination. The weather rally has since cooled a bit as traders await Friday’s USDA supply and demand report. Does the recent bull run have legs? Our experts weigh in with a few thoughts on navigating choppy weather markets while keeping an eye on the long game.
- What to do about the recent grain market rally? Think about baseball
- How a simple marketing plan can insulate you from volatile markets
- PLUS: Why it’s important to keep an eye on fertilizer prices for 2027
Brady Huck, Empower Ag Trading
“The recent rally in grains should come as no surprise after such a significant fund liquidation ahead of a critical time for crop development. The duration of this rally and whether we can sustain and extend recent gains is largely dependent on weather forecasts and demand.
“Many believe we have been trading a ‘perfect’ crop to this point and if pockets of production start to develop larger problems, these markets may strengthen if production threats persist. Looking at fund positioning, managed money can drive markets in either way at this point, and unfortunately, it’s impossible to predict which direction these markets will go until the forecasts unfold.
“We don’t get bull markets often so it’s important that when they come along, you make the most of them. It seems the old baseball metaphor applies: hitting singles and doubles instead of chasing home runs, an easy sell when you've been striking out for the past 60 days. With the demand base we’ve built, these markets are a few production hiccups away from more exciting times. Don’t paint this market in too small of a box. – Brady Huck, principal and adviser, Empower Ag Trading
ACTION: Remain disciplined in rewarding rallies in a meaningful way to protect balance sheets while at the same time avoiding blind directional price bias as global balance sheets can change rapidly.
Cesar Cruz, Advance Trading Inc.
“Brazil has Iran as one of the main markets for corn and if for some reason the conflict continues and for logistical reasons they cannot export to Iran for the old Middle East that corn has to look for a different home and that is more likely to compete with our exports.
“At the same time Argentina is also producing a very large crop. The 2025-26 crop in Argentina is decent. Argentina usually on average exports almost 70% of their production. They cannot consume everything they produce. So, for the rest of 2025-26 there will be more competition against our new crop exports at the beginning of the new market year: September, October and November. That’s something that we need to keep looking at going forward.
“I think we need to manage our costs. We need to manage our risk. It's hard. We cannot predict prices. We always have to find someone who can help us manage our risk. Prices are very volatile. They can go up and down. We don't know exactly where they're going to go. And there is a lot of competition out there.” – Cesar Cruz, director of research, Advance Trading
ACTION: Focus on what you can do at home to get a better price. Work with leaders to develop an industry strategy.
Siddhartha Jha, Arbol
“The El Nino developing now is forecast to strengthen into late 2026, with sea-surface temperatures forecast to peak in the fall (around September through November) and El Niño conditions persisting into the 2026-27 winter. El Nino's influence on U.S. weather is at its weakest in summer and strongest from roughly October through March. So, the flood risk that matters most for this event isn't really a summer story. It's a fall-and-winter one, but the smart time to prepare for it is now. When a strong El Nino does assert itself, the wet signal is geographically consistent.
“The Gulf Coast from Texas through Louisiana, Mississippi, Alabama and Florida, along with the broader Southeast, is the most reliable area for above-average precipitation and elevated flood risk. It is one of the most consistent wet signals in the U.S. El Nino record: NOAA’s historical composites show above-average odds of a wet winter across the southern tier, with the strongest signal in moderate-to-strong events. The northern tier, including the Pacific Northwest and northern Plains, tends to run warmer and drier, which is its own kind of risk for the growers up there. For farmers, the takeaway isn't to watch the sky this summer. It's to recognize that a wet winter is being telegraphed months in advance for specific regions, and that early warning is the opportunity.
“The most valuable thing about an El Nino is that it's one of the few climate signals you can see coming a season or two out. That lead time is the actionable part. A few things I'd point to. First, know which signal applies to your ground. A grower on the Gulf Coast or in the Southeast should be planning around a wetter fall and winter, which means field drainage, tile maintenance, grain storage and moisture management, and harvest timing that accounts for a higher chance of wet-weather delays. If you farm in a region the forecast is flagging, the months before the risk arrives are when that conversation is worth having, not after.” – Siddhartha Jha, CEO, Arbol
ACTION: El Nino allows you to plan ahead for future probabilities, so assess your potential risks sooner rather than later.
David Widmar, Agricultural Economic Insights
“Which would leave you with more regret. Selling corn on a Monday, only to watch the market rally 25 cents per bushel by Friday? Or planning to sell corn on Monday, but not pulling the trigger until Friday, only after prices have fallen by 25 cents? There is no right or wrong answer; the point is to recognize which scenario leaves you thinking, ‘I should have…’ or ‘I knew better…’ Even when the economic realities are largely the same, our minds perceive regret differently.
“The market has given producers plenty of opportunities for regret over the last 45 days. For December corn futures, prices moved from $5.00 per bushel in mid-May to around $4.25 by late June. One way to insulate your thinking is to put together a simple marketing plan, even if it’s just for the next 45 days. This shifts the focus from ‘I made a bad decision’ to ‘my plan could have been better.’” – David Widmar, ag economist, Agricultural Economic Insights
ACTION: The reality is that it’s extremely rare to market bushels without regret. A simple plan will not eliminate regret, but it can keep regret from becoming the marketing strategy.
Greg Ibendahl, Kansas State University
“For corn, the bottom line hasn’t changed from recent weeks: this is a decent, not great, crop being produced on meaningfully fewer acres than last year, and that combination makes a smaller total crop the odds-on outcome. What’s new this week is the ability to say how odds-on — the crop is roughly 93% likely to fall short of last year’s production, based on what we knew as of July 5. That number will keep sharpening as more condition reports come in and the range keeps narrowing.
“Keep a very close eye on fertilizer prices, which are tied closely to the price of oil. In five months, we will be in the window when farmers will be purchasing fertilizer for next spring. With oil prices down from a war-driven May peak, we should see fertilizer prices start to back down. However, the situation with Iran is far from over. As we saw this week, Iran hostilities can escalate again, driving up both oil and fertilizer. The strategic petroleum reserve that we’ve been using to moderate oil prices is at record lows now. There’s not a cushion there anymore.” – Greg Ibendahl, agricultural economist, Kansas State University
ACTION: Farmers should watch fertilizer prices closely between now and Christmas. If fertilizer prices ever get back to pre-war levels, I’d lock in my supply for spring 2027.
Lauren Urbanczyk, Texas Hedge Risk Management
“We are at the point in the growing season where Mother Nature still has the final say. Weather risk brings swings on both sides: higher and lower prices. The producer should be prepared for that volatility with three things. One, having a good handle on your expected production (as best you can) and knowing what percentage sold you are and how sold you want to be. Two, having working orders for additional sales. And three, coverage with some options to protect you during these volatile moves.
“You may be protecting equity in higher hedges with calls, buying courage calls so you feel confident making those sales when/if targets are hit, or buying puts to give yourself a floor and allow yourself to stay flexible as the growing season progresses. Short-dated options give us lots of flexibility at a more reasonable cost and should be used to your advantage.” – Lauren Urbanczyk, cofounder, Texas Hedge Risk Management
ACTION: Options allow you to protect your crop while staying open to whatever the market has to offer.
Dustin Johnson, AgYield
“Grains have rebounded nicely following the long holiday weekend as weather fears and fresh demand signals have boosted prices. The December 2026 corn contract had its largest two-day cumulative rally leading into July 7, up 5.15%. As of this writing, we don’t yet know how many contracts the Managed Money Funds have bought back during this move. We would assume they have played a significant part of this price discovery process, however, after adding large short open interest during the month of June.
“November soybeans have once again breached $12 following the report that China bought another 336,000 metric tons of new crop soybeans on Wednesday. This brings total known commitments to China to 536,000 MT, just over one-fiftieth of the 25 million MT that were agreed upon per marketing year. It is interesting to see the market’s reaction to this business. Did the market not expect China to start showing up with those agreements in place? What is the average market participant's guess for total Chinese demand for U.S. soybeans (and corn for that matter)?
“Not all of the price support was on account of the new Chinese business. The ECMWF 14-day forecast has baked in heat and below-normal precipitation. We know many growers that would welcome the heat at this point so long as humidity stays high and disease pressure can be managed. However, for the country as a whole, we would assume these conditions could bring national corn yield potential down if played out as predicted. The need to ration some of this record demand may be needed if the yield expectations start to drop below trend. Therefore, the price action makes sense to us.
“Today, with the market in rebound, many of those revenue floors are starting to get further away in proximity to today’s price. At this stage in the year, growers also know much more about crop size and can roughly estimate how that changes the present farm margin. For growers in areas that have received favorable conditions, above-average yields can also lower the crop insurance price ‘trigger’ levels. Given this setup, growers that have higher yields may have better reasons to sell on this rebound as it can actually lock in a margin and reduce price risk. Conversely, growers in areas with severe yield cuts and low deductible insurance policies may not want to do that. Why? Insurance payments would only grow as prices drop, along with Farm Bill payments. Therefore, selling too much in the mid $4s doesn’t really help the balance price exposure in many cases.” – Dustin Johnson, director of hedging operations, AgYield
ACTION: If you are expecting high yields this season, it may make sense to make some sales following the recent rebound in grain prices.
Luiz Fernando Gutierrez Roque, Hedgepoint Global Markets
“What should we keep an eye on in the WASDE report for soybeans and corn? For soybeans, we need to pay attention to the U.S. production figure for the 2026-27 season, which is likely to be higher than indicated in the June report due to the increase in planted area noted by USDA in its acreage report. However, a decline in yields for U.S. crops cannot be ruled out, given that crop conditions are below the levels recorded in 2025. If this occurs, production may grow less than the market average expects, which would also affect ending stocks. For corn, attention should be divided between the U.S. figures for the 2025-26 and 2026-27 seasons.
“For 2025-26, USDA may raise its U.S. export forecast for corn, as the total sold to date already exceeds the June estimate. This could lead to lower ending stocks, which would also impact the 2026-27 outlook. Furthermore, looking ahead to 2026-27, no major change in production is expected, as USDA indicated in its acreage report that the planted area is virtually the same as the current estimate (the area from the prospective plantings report). However, surprises cannot be ruled out regarding yield, just as with soybeans.” – Luiz Fernando Gutierrez Roque, market intelligence coordinator, Hedgepoint Global Markets
ACTION: Keep a close eye on how USDA’s July WASDE report could affect grain prices on Friday and into next week.
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