Top Tips on a Thursday
Tuesday’s World Agricultural Supply and Demand Estimates report gave the grain markets something they hadn’t seen in months: a reason to rally. USDA’s surprise cut to corn yields and a tighter-than-expected soybean carryout sent both markets surging off multimonth lows, offering farmers a welcome, if cautious, sense of relief after a brutal two-month slide.
But is this the bottom or just a bounce? The latest Top Tips experts are divided on how far the rally can run — and what it means for your next move. Some see an opportunity to re-own bushels sold off the combine. Others urge patience, pointing to South American weather, fund positioning, and looming uncertainty around Russia and Ukraine and global wheat supplies. One adviser even challenges whether more information actually makes for better decisions.
Here’s what this week’s experts are watching and what they recommend you do about it.
- Do USDA’s lower corn yields and tighter soybean stocks mark a genuine price floor?
- Fund positioning in corn and soybeans could cap or extend the rally.
- Plus: Consider input costs, storage decisions and options strategies for the months ahead.
Andrew McCarty, Pluto Commodities
“Tuesday’s USDA report provided some bullish surprises, lowering corn yields to 179.6 bpa and tightening ending stocks to 1.758 billion bushels. Soybeans also received support from stronger export demand and tighter stocks, although South American production remains a concern. Wheat continues to struggle with growing global supplies despite ongoing uncertainty surrounding Russia and Ukraine. Overall, USDA gave the markets a reason to rally, but sustained strength will require demand to follow through.
“As a producer, I am watching corn exports, continued Chinese soybean buying, and South American weather as planting progresses. Firm basis and tighter corn spreads are encouraging, but I would still use meaningful rallies to make incremental sales rather than assume the lows are behind us. Keep an eye on 2027 acreage expectations as well.”
— Andrew McCarty, founder and president, Pluto Commodities
ACTION: Don’t assume the lows are behind us. Instead, consider making a few incremental sales.
Brian Quinn, Quoreka
“Winter wheat in the U.S. is a big wild card. Last year was unbelievably dry, and 2027 looks like it will be wet from a super El Niño, which will cause droughts in other parts of the world. We have two wars going on along with trade disputes. It’s really hard to predict. The long-term wheat acreage trend has been down, and last year’s winter wheat crop was bad, but this week’s crop report indicated that acreage is up this year despite the expected lack of fertilizer and drought during planting in hard red winter wheat states. If wheat prices are low next spring, many farmers may just abandon their crop. But just by planting the wheat, they’re improving the soil. And it is an El Niño year, which typically means a lot of precipitation in the South. Planting in dry soil is very risky as farmers must choose to plant deep or seed in the dust and hope for quick rain.
“But there seems to be a lot of uncertainty about what this winter wheat crop is going to be like if the demand is going to be there. There are also questions whether the lack of fertilizer drove more planting and whether or not the water table is going to recover. You also have the question of how wheat performance may affect corn and soybean plantings next spring. Individual producers need to consider how much self-storage they may participate in over the coming year. We’re seeing very expensive storage costs. Yet it seems like more and more farmers are going to self-storage.”
— Brian Quinn, chief product officer and analyst, Quoreka
ACTION: Keep a close eye on the Russia-Ukraine conflict and on trends in interest rates, fertilizer and storage costs.
Joe Fallico, Insignia Futures & Options
“After declining sharply from their September highs, soybean futures received a much-needed boost from USDA’s November WASDE report. While USDA slightly increased its production estimate, projected U.S. ending stocks for the 2026-27 marketing year were reduced from 315 million to 300 million bushels, surprising analysts who had expected an increase. Strong domestic crushing demand and an improved export outlook continue to provide underlying support.
“From a technical perspective, January soybean futures rebounded sharply from recent lows near $11.85, but the market still faces overhead resistance following its two-month decline. With U.S. harvest nearly complete, attention is shifting toward export demand, Chinese purchases and South American growing conditions. Brazil’s projected record crop could eventually pressure prices, while unfavorable weather or stronger-than-expected demand could provide additional support. The recent rally is encouraging, but it is too early to conclude that the downtrend has ended. Producers holding unpriced soybeans should consider using price rallies to evaluate incremental sales or protective hedging strategies rather than relying on a sustained recovery. Put options may provide downside price protection while preserving upside participation, although premiums and other costs must be considered.”
— Joe Fallico, commodity futures broker and president, Insignia Futures & Options
ACTION: Establishing price objectives and evaluating local basis conditions can help guide marketing decisions as the market responds to changing fundamentals.
Chris Swift, Swift Trading Company
“Harvest is nearly complete this year. Questionable yields from drought areas, and surprises from USDA, have made for significant price fluctuation. At these price levels, and with USDA quick to revise the October report, I prefer to see the next two reports before developing marketing ideas for 2027. Military actions between Russia and Ukraine remain on the front burner but are merely simmering at the moment. A shift in political agenda next year will reshape a great deal of government support and regulations, and none of the newly elected appear friendly toward commercial farming.
“Input costs are expected to remain elevated, even if off their highs. Diesel is approximately $1 off the summer high and $2 off the spring low of 2026. This leaves a lot of room for error. Consider booking a fourth of your spring fuel needs on this dollar break and begin to average from there. Nitrogen fertilizers would be next. Predictions of a colder-than-normal winter, and a very dependent Europe has potential to push natural gas prices sharply higher, even if for a short period of time.”
— Chris Swift, founder, Swift Trading Company
ACTION: Fixing costs in this very volatile price environment will be a great benefit.
David Widmar, Agricultural Economic Insights
“In the 1970s, psychologist Paul Slovic set out to study how information influenced decision-making. The study considered horse-race predictions and whether different amounts of information — such as the horses’ weight, past performance and details about the jockey — influenced their predictions. Participants received between five and 40 pieces of information. In short, did more information improve accuracy?
“The short answer was no. On average, accuracy didn’t improve when the bettors received more information. However, participants’ confidence greatly increased when they received more information.
“We are all susceptible to the gap between accuracy and confidence. If we read more market reports or yield projections, are we improving the accuracy of the grain marketing decisions we make or just gaining confidence?”
— David Widmar, ag economist, Agricultural Economic Insights
ACTION: Before reading the next market report or WASDE update, consider what new information would cause you to change your marketing decisions. Without this practice, we risk letting market noise influence our decisions.
Matthew Pot, Grain Perspectives Inc.
“The next time USDA releases yield estimates, Christmas will have come and gone. In the meantime, the set-up in the markets is positive, but with negative limitations. For corn, the funds have essentially liquidated their outright long positions while adding some short positions. For soybeans, they are still holding long positions. After Tuesday’s rally for soybeans, being aware of the retracement regions is important to establish potential targets if wanting to catch up on sales. With the long positions still present, fund selling could still limit any rally. The weather stories for South American production become more front of mind in mid-December (and for idle money, a month is a long time). We should not discount that interest rate probabilities are once again on the rise following October’s Consumer Price Index data, and on Friday, we get a look at the Producer Price Index data.
“The rally for soybeans Tuesday was a result of USDA not increasing average yields by a large margin, publishing the average yield at 53.3 bushels per acre. Ending stocks fell as a result of export increases offsetting a smaller increase in yields. The export sales pace is ahead with China buying, but within the current China-U.S. framework that stalls at 25 million metric tons, South American production is the relative factor.
“Meanwhile, corn did not follow with the same aggression higher on Tuesday, but the underlying trends make an argument for more support for the market. The reduction in yield to 179.6 bushels per acre makes the balance sheet tighter, but whether stocks-to-use falls below 10% after the January report will depend on export sales in the next two months. With the funds now net short in the corn market, it would take a pretty large bearish catalyst for them to add to the short side at this price level. This makes the argument that, in the short term, soybeans are the directional market.”
— Matthew Pot, founder, Grain Perspectives, Inc.
ACTION: Soybeans are leading, but fund length could still cap rallies. Use retracements to set sell targets and catch up on sales.
Lauren Urbanczyk, Texas Hedge Risk Management
“The market has turned the corner and is benefiting from renewed momentum across the grain complex after this month’s WASDE report. With the USDA lowering corn yields, the bulls have new hope that the crop does not get larger from here. This is a great time to own cheap upside, or to look at cheap puts on unprotected grain, and allow yourself to give the market your time and not your money. When December options expire next week, we will see more attractive pricing on options versus the March corn contract. We specifically want upside coverage that extends beyond the January report.”
— Lauren Urbanczyk, co-founder, Texas Hedge Risk Management
ACTION: A 50% percent retracement of October’s monthly move would be a great place to reward any potential rally.
Jason Gehler, Blue Line Futures
“The post-USDA corn and soybean rally reflected relief following the two-month slump and is a pretty good signal that we might be close to price lows. A 300 million-bushel soybean carryout for the U.S. is historically pretty tight. That’s just not a lot of breathing room. Plus, I think there’s a bet to be placed on the South American growing season and what El Niño does to their crops.
“March 2027 corn futures at $4.50 seems pretty cheap now. For any bushels you sold in the past, or if you had to sell off the combine, I think this could be a re-ownership opportunity. Watch for a 20- or 30-cent bounce, stay disciplined and look for those opportunities. If March 2027 corn can bottom around $4.50, maybe we can see a relief rally up to $4.80 or $4.90. I don’t see us screaming back up to $5.50 any time soon because we’re not in the time of year when you have major weather rallies. You don’t have to run this market back up big-time.
“With soybeans, you may have been kicking yourself for not selling before we got combines rolling, but I think now you’ve got a little bit of an opportunity. If you got bin space or if you’ve got bushels that you paid to store for a few months already kind of locked into place, I don’t think you want to react right away. I’d let this thing kind of come up a little bit more. Maybe you’re looking at $12.50 to $13. Let’s get into a little bit of the South American weather story.”
— Jason Gehler, senior market strategist, Blue Line Futures
ACTION: If you previously sold bushels, consider re-ownership opportunities in March call options.
Brett Friedman, OptionMetrics
“You see a lot of coverage in financial media about which commodities have returned the most, which have returned the least, and which are the most volatile. Not surprisingly, crude oil has dominated the news this year. Agricultural commodities have had very good returns, including wheat, corn, soybeans and sugar. OptionMetrics compiles historical options and implied volatility data for institutional and fund traders, and many of the ag commodities are currently standing out in terms of returns and volatility.
“Implied volatility in futures and options measures the market’s expectations of the magnitude of future price swings. For a window into the mindset of fund and institutional traders, understanding implied volatility is important, and it’s also important to understand if you’re using options in a hedging strategy. Soybeans, for example, are heading into a lower-volume, lower-volatility period of the year, which is partly seasonal due to the end of the U.S. harvest.
“At the moment, soybean volatility is very low, even adjusting for seasonality. That could mean there are some opportunities. If I were hedging beans with options, the fourth quarter would be the most favorable because options are typically cheap, not during the summer or middle of the harvest when they’re typically incredibly expensive. There may be some opportunities at this time of year.”
— Brett Friedman, Contributing Analyst, OptionMetrics
ACTION: Keep a close eye on implied volatility in grain markets and consider hedging opportunities in options.