Top Tips on a Thursday
Print this week's Tip Sheet for your farm office.
Corn and soybean futures nosedived this week as Midwest forecasts turned wetter and dryness worries faded. But markets are still up sharply for July, offering producers opportunities to “reward” the rally with sales. With a critical month for crops and markets looming, our experts detail a few key factors to watch and action steps to consider.
- Odds are December corn highs are in – but what about March? Upside still possible
- Cattle market faces more downside if ports open but outlook isn’t entirely bearish
- PLUS: Grain bins cleaned out yet? Management pointers to avoid storage headaches
Jon Scheve, Scheve Grain
“There's a 75% chance that the highs have been put in for December corn futures and a 25% chance they have not, based upon the last 50 years of seasonal patterns. But if you gave me all the way to the March 2027 contract, I’d say the highs are not in yet. The reason is I think the current values for wheat and beans, which can turn profits for next year, favors a switch from corn acres because values are below the cost of production in 2027. Additionally, South America likely has a fertilizer issue that could show up in early 2027 because of the Middle East war.” – Jon Scheve, advisor and owner, Scheve Grain
ACTION: Old-crop corn needs to be sold, as you are likely out of time and the odds don’t favor a rally. For new-crop corn or beans, look to sell whatever you can’t store at home sooner rather than later. Consider storing corn over soybeans if you can’t store both.
Brian Basting, Advance Trading
“We want to reward the market with this rally. How can we do that? We can do that with a variety of strategies. We can use the marketing tools available to us to keep the upside price potential open, even though we may be setting a floor with a preferred sale, whether an HTA (hedge-to-arrive) or a cash sale. We can also simultaneously purchase a call option to leave an opportunity open if something were to surprise us in August or September, whether on the demand or supply sides. We want to leave that upside potential open.
“We want to defend our balance sheet, meaning we want to defend the opportunity that these prices are providing. Managing the prices that are afforded by the market to your operation falls under the heading of defending your balance sheet and using the tools that are available.” – Brian Basting, grain economist, Advance Trading
ACTION: Establish price floors through cash sales or hedge-to-arrive contracts while simultaneously purchasing call options to maintain upside potential. Exercise control by using available marketing tools.
Naomi Blohm, Total Farm Marketing
“After soaring during the first three weeks of July in a counter-seasonal rally, grain futures wiped out much of those gains this week due to better rain potential for much of the Midwest. For corn futures, it all boils down to weather and yield perception. If national corn yield is 183 bushels per acre as the USDA currently predicts, then ending stocks for the 2026-27 crop year will be near 1.78 billion bushels, which is comfortable. It would, however, set the stage for South America needing to have near-perfect corn growing weather in January and February 2027 as global production is starting to edge lower with a potentially smaller U.S. and European corn crop.
“In the coming weeks, should corn yield be perceived to be less than 180 bpa, then ending stocks would be closer to 1.5 billion bushels, which might solidify an early harvest price low. The overly bearish sentiment in the corn market the past year has shifted to neutral and futures could become quite friendly in 2027, depending on how other countries' corn crops fare, and ultimately where U.S. corn yields end up.” – Naomi Blohm, senior market adviser, Total Farm Marketing
ACTION: Keep an eye on the key $11.75 support level in November soybean futures, which would mark a 61% Fibonacci retracement correction and could be an area that attracts fresh buying.
David Widmar, Agricultural Economic Insights
“‘Do you think grain prices will rally?’ We regularly ask ourselves (and others) versions of that question, but it is often too vague to be useful. Which commodity? Over what timeline? How much does the market have to gain to classify as a rally?
“A better question is ‘What do you think is the probability of December 2026 corn futures exceeding $5.25 before December 1?’ This is much harder to answer. That is also what makes it useful. Thinking probabilistically forces us to define the outcome and timeframe while quantifying our expectations. Like a weather forecast, our expectations can be updated as conditions evolve and meaningfully compared with others.” – David Widmar, ag economist, Agricultural Economic Insights
ACTION: Replace one broad market question with a specific, probabilistic question. Write down your answer and revisit it next week. Better grain marketing decisions often start with better questions.
Garret Arndorfer, AgMarket.Net
“Cattle prices could drop should regulators look toward reopening ports. With the Douglas, Ariz., port of entry scheduled to reopen to cattle imports Aug. 24, fundamental support for cattle prices shifts. While the mechanics of the reopening remain unsettled, officials are characterizing Douglas' reopening as a 30-day trial. Early indications suggest the initial phase may be limited to beef feeder cattle. Should the trial proceed without incident and New World screwworm cases remain contained, two additional New Mexico ports are expected to consider a similar partial reopening.
“The outlook isn't entirely bearish. August feeders have defended the $336 level throughout the year, and the Feeder Cattle Index continues to trade at a premium to futures — a combination that remains supportive of the front-month contract, provided the cash market can absorb the supply implications of these headlines.” – Garret Arndorfer, hedging strategist, AgMarket.Net
ACTION: Manage risk from softening cash fundamentals, as both the boxed beef cutout and the CME Feeder Cattle Index work lower, reinforcing a downtrend.
Don Cook, Mississippi State University
“Proper grain bin management is critical for protecting your investment from insect infestations. This is especially important if you plan to store grain for a longer period, perhaps waiting for a better price. First, understand which crops are most vulnerable. Not all crops face equal risk in storage. Things that are high starch tend to be at risk for infestations. Soybeans are high protein, and generally, I’ve never heard of very many issues in beans.”
“Also, consider grain protectants for long-term storage. For producers planning to hold grain beyond the cool winter months, grain protectants become almost a must. These products are similar to seed treatments used at planting as they are applied directly to the grain in the auger stream as grain enters the bin.” – Don Cook, associate research professor and entomologist, Mississippi State University
ACTION: Clean out old grain from the bins and remove any weeds and debris around the bins, which can harbor insects. Match your management strategy to storage duration.
Luiz Fernando G. Roque, Hedgepoint Global Markets
“Earlier this year, the U.S. government approved an approximately 61% increase in mandatory biodiesel blending volumes. Demand for biodiesel is proving to be an important factor supporting the U.S. soybean market, reducing the reliance on increased exports to keep stocks at levels that result in favorable prices for U.S. producers. In this regard, U.S. producers may once again see some relief in their profit margins compared to recent years, creating a healthier environment for decision-making regarding planting intentions and the sale of their crops.” – Luiz Fernando G. Roque, market intelligence analyst, Hedgepoint Global Markets
ACTION: Producers should closely monitor growth in the biodiesel industry and renewable fuel policies to guide 2027 planting decisions.
Print this week's Tip Sheet for your farm office.